Do your eyes glaze over when you hear the term “due diligence?” Ours, too. Although the phrase might conjure up some boring fact-finding mission, we were reminded recently of just how crucial due diligence is to the success of any business.
We attend industry events to better understand the challenges facing our clients, and we spent a few hours last week at the Chicago Building Congress’ “Distressed Construction” seminar.
In each of the construction projects presented, companies had signed on the dotted line without reviewing the scope of work fully or checking out the contractors they hired. That lack of oversight meant lots of cost overruns and missing elements in the projects. In one particularly bad case, contractors built a casino with no restaurant inside.
These horror stories got us thinking about the need for due diligence in any industry. Here’s our take on why it pays to do your homework:
- It protects you. Investing some time on the front end of a new project or business relationship can save you a lot of headaches down the road. Make sure to research potential partners thoroughly by asking lots of questions, checking references and looking at their past work. The same goes for anything you sign – read the fine print carefully. And once you embark on a new venture, due diligence shouldn’t end. A lot of these companies got burned by turning over the reins to someone they ultimately couldn’t trust, so check in regularly to evaluate progress and head off any problems.
- It adds value for your clients. When you make a value proposition to a prospect, you want it to be one that actually has value. Just like we wouldn’t assume that social media is for everyone when developing a marketing strategy, you have to consider what does and doesn’t work for your own clients on a case-by-case basis. Putting in the legwork ahead of time to research a prospect’s wants and needs keeps you from wasting their time – and makes you look better.
And if you’re still not convinced of the importance of due diligence, consider this: How much time would you spend in a casino if you had to leave to eat or drink?