If you want to learn about how to do your due diligence, then it is important for you to read this article. You may have heard me use the phrase, “ensure you do your due diligence,” in a number of articles and that is a fair statement, but it struck me after talking with a close friend, what if my readers don’t understand what doing your due diligence entails? So this article has been put together to give you an understanding of what due diligence is, why should we do due diligence and most importantly, how to do due diligence effectively when looking for ventures/opportunities working from home.
What Is Due Diligence?
You will often hear this phrase, “do your due diligence,” but what does that mean exactly? Due diligence is the research, analysis or vetting process that involves information being gathered and studied, so an informed decision can be made when looking to take on a new venture or opportunity.
The process varies in regards to depth and analysis required depending on what you are looking at doing. For example, if you are buying an investment property, the due diligence process will be very different to starting a work from home opportunity with a multi-level marketing company.
It is important to note that there is a difference between ensuring due diligence and being over cautious. You can certainly overlook a good opportunity by not conducting your research in a fair and ‘level-headed’ manner. For example you may be fearful of all the negative reviews about online opportunities, but there are certainly many legitimate and financially rewarding ways to make income online, so don’t allow that prejudgment to cloud your ability to do fair due diligence as you may be limiting your opportunities or even worse overlooking great ones.
Why Should We Do Due Diligence?
Great question! We want to ensure that what you are looking at is legitimate and legal. There are many opportunities out there that are not above board and are scams. So part of the due diligence process is to make sure that they are who they say they are, so you are not wasting your time and money!
Is the opportunity a good fit for you? This is another important reason as to why due diligence is important. You need to know if you are going to have the skills, aptitude, desire or experience to succeed. Maybe your new to this type of business, will it support and teach you on your journey? This is vital information to be considered.
Due diligence also allows the chance to get to know more about the venture/opportunity. How do they do business, what are the pro’s and con’s of this business model? What are others saying about their experiences? Looking at testimonials and reviews can tell you a lot about a company, just remember though, all companies have complaints, what is important is how they deal with the complaints.
How To Do Due Diligence Effectively.
Is the company transparent? Is there information available freely to those that require it? Be aware that quanity doesn’t mean quality. You need to be able to look past all the well written marketing information and get to the important stuff. Look for information such as:
- Are they a registered business.
- How long have they been in business.
- Who owns the company.
- Who are their leaders and are they well respected.
- Are they members with governing bodies, such as the Better Business Bureau (BBB).
Ensure you understand how their money is made, or how you make money. This will tell you a lot about a company and whether they are legitimate, a scam or a ponzi scheme. A good point to remember is that if it seems to good to be true, it most probably is.
Can you talk to a real person? I don’t know about you, but if I find it difficult to make contact with a business, I usually stay clear. It is important that it is easy to communicate with the venture/opportunity and it is always reassuring to speak directly to someone who can offer assistance for whatever reason. Saying this, many online businesses offer different avenues of communication such as online chat, email, lodge a ticket and a phone number. With generation millennial, these internet age communication methods, are more prevalent, so don’t be surprised if you come into contact with businesses where you cannot pick up the phone and call someone. All I can suggest in this situation, is go with your gut. If it doesn’t feel right or you prefer to pick up the phone to talk to someone, then if they don’t offer that, it is not a fit for you.
We have learnt why it is important to conduct your due diligence before diving into a new venture/opportunity. You now understand what due diligence is, why it is important and how to make sure that you gather the correct information to ensure the opportunity is legitimate and the best fit for you. Please remember that the information you need to collect and analyse will vary depending on what you are looking to venture into. I hope you have found the information useful. If you have any questions, please feel free to leave them in the comments below.