Commercial Due Diligence - What Does Good Look Like?

Hiring industry executives or consultants for separate aspects of a business can lead to conflicting answers. For example, a restaurant chain received advice to save on protein, raise sandwich prices, and reduce labor. This resulted in smaller, more expensive sandwiches and dissatisfied customers. In a competitive bidding process, positive assumptions are often favored, leading to unrealistic numbers. Integration and collaboration between operational and commercial diligences is crucial. Profit opportunities should be grounded in bottom-up analysis. Data and insights from external firms are important, as operational advisors often rely on personal experience. Management buy-in is vital for successful execution of a value creation plan.