There are very few owners of any size companies that have not been approached to sell their companies in the last couple of years. There is lots of money available and lots of buyers. In today’s global business environment, it is imperative that you know with whom who you are conducting business, or considering dealing with. Also, businesses must be alert to attempts by competitors or foreign interests to obtain confidential business information from your company.
The attention and care necessary for a proper due diligence can call for a variety of investigative techniques. Services can range from determining a customer’s financial status to assessing the desirability of acquiring their companies. It could entail limited public records search, database research, single and multi-jurisdictional searches, to the use of covert and overt investigators.
Due diligence profile reports address undisclosed issues such as:
• Extensive litigation and/or bankruptcies
• Misrepresentation or character issues
• Unpaid tax liens and/or judgments
• Criminal records or associations
• Credit or financial problems
• Fraudulent or exaggerated credentials
• Securities or other regulatory violations or disciplinary actions
• Past business failures and related debt
• Poor reputation
“…If a foreign company or country can save hundreds of millions of dollars on R&D by stealing technology, they’re going to do it.”
–USA Today Article, Donald Przybyla, FBI Supervising Agent, Palo Alto, CA.
North American businesses lose billions of dollars a year as a result of espionage, and over a trillion dollars in the last decade. No company or organization is immune from being targeted for attack, and to smaller firms, a thousand-dollar loss could be more damaging than the loss of millions to larger businesses.
Who is at risk? The menace strikes every kind of business: big or small, high-tech or low-tech, industrial or service, professional or trade, profit or nonprofit. What is the primary target? Just to name a few, information or ideas about products, marketing strategies, lists of suppliers, sales data, customer names, personal information, and security plan.
Who is the adversary? Sometimes, the thief is a business competitor; sometimes, an employee wanting to strike out on their own – unfortunately with your trade secrets and hard work or other intellectual property. Sometimes, your adversary works for a foreign nation or foreign-owned entity, and often the culprit is a business associate you trust most.
As John D. Rockefeller once said, “The next best thing to knowing all about your own business is to know all about the other fellow’s business.”
Why do you need competitive intelligence? Here are some of the important reasons:
• The pace of business is increasing rapidly
• Information overload
• Increased global competition from new competitors
• Existing competition is becoming more aggressive
• Political changes affect businesses quickly and forcefully
• Rapid technological change
What can intelligence do for your business? Here are some samples:
• Foresee changes in the marketplace
• Anticipate actions of competitors
• Discover new or potential competitors
• Learn from the successes and failures of others
• Increase the range and quality of acquisition targets
• Learn about new technologies, products and processes that affect your business
• Learn about political, legislative or regulatory changes that can affect your business
• Enter new business
• Look at your own business practices with an open mind
• Help to implement the latest management tools
And once you have this business intelligence, you must now secure it. Information security can help you control and secure information from inadvertent or malicious changes and deletions or from unauthorized disclosure.
Business information is a key business asset and therefore very valuable, its availability, integrity and confidentiality may be critical for the continued success of your business.
Your information security can be breached in a number of ways such as system failure, theft, inappropriate usage, unauthorized access or computer viruses. Remember, the long-term impact of any breach can directly affect the cash flow and competitiveness of your business.
To merely scoff at the suggestion of a breach in your business may court disaster.
Unfortunately, a security breach could happen to you and maybe it has already happened; yet you have not experienced the impact. The effects may not be obvious immediately.
An increasingly large number of companies have found out to their cost, security “accidents” and breaches are quite common and a growing problem.
By: Mark Borkowski is president of Mercantile Mergers & Acquisitions Corporation, a company specializing in the sale of privately owned businesses. He can be contacted at (416) 368-8466 ext. 232 or firstname.lastname@example.org or www.mercantilemergersacquisitions.com