Research suggests that the chances of an acquisition working out as planned only stands at around 50 percent.
It is crucial, therefore, that you properly conduct commercial due diligence when deciding if acquiring a particular business is the right move. We already have an in-depth guide to commercial due diligence that you can find here. Today’s article will look specifically at how Red Flag Alert can help with the process.
Speed Up Your Due Diligence
Red Flag Alert gives a credit score to every business in the U.K. based on dozens of data points that are updated daily. The score can help you quickly assess whether a business is financially healthy, without having to trawl through a company’s accounts.
This can act as a useful filter to build a shortlist of viable acquisition targets or act as a quick initial review of a potential target.
Use Up-to-Date Data
It’s crucial that you use up-to-date information when researching potential acquisition targets. Red Flag Alert’s data is updated daily with over 100,000 updates.
These updates can be integrated into your CRM using the Red Flag Alert API. Additionally, you can set up alerts about potential targets, so you will know straight away if changes occur to businesses you are targeting.
Learn From Our Exceptional Support Team
At Red Flag Alert we have a fantastic support team on hand who will show you how to get the most from our data by reviewing your current processes and suggesting ways to optimise your data use.
We’ll even work with you to integrate our data into your business as necessary and train your team in how to get the most value from it.
Discover Key Business Details
As well as a wealth of financial data, our information will provide you with details of the key decision makers at an organisation.
This will allow you to look at what other businesses they are — or have been — involved in. You can then see how these businesses are performing, and whether their interests may influence the decisions they may make at the target organisation.
Review the Competition and Market
Red Flag Alert’s data will give you a detailed look at the market you are planning to enter, as well as the competition.
Using detailed Red Flag Alert information, you can first build an accurate profile of competitors’ size, structure, and historical performance. It’s easy to then compare potential competitors with the company you are considering acquiring.
Additionally, you can look at other organisations that interact with your target. This can help you detect any issues that may arise while giving you a more in-depth look at expected performance.
The data also tells you if there are any new entrants to the industry and how these companies are performing; potentially revealing disruptive threats that may exist.
Combined, this information will give you crucial insight into challenges or opportunities you may face in the future if you acquire a business.
If you aren’t sure what type of business you want to acquire, Red Flag Alert can help you filter organisations based on the data you are looking for in a target.
You could search for only businesses that are growing or that have a specific market capitalisation. You can then filter this by, for example, location or industry to narrow down the shortlist further. Doing this can help you quickly and easily build a list of potential acquisition targets.
Analyse an Organisation’s Financial History
Our data includes detailed historical financial information such as accounts and financial ratios, helping you make a quick assessment on how a business is performing. You can then compare this to overall market trends to see how your target is doing compared to its competitors.
This could provide some valuable insights. Growing organisations could be an opportunity if the market is right and you have the resources to bring to the table.
Alternatively, you could find companies that are underperforming and may provide an opportunity for growth. Meanwhile, a safer bet could be a company with a long and stable history.
Set Up a Free Consultation to Learn More
To learn more about how Red Flag Alert can help with your business perform commercial due diligence, book a demo with our team today.