A due diligence study of a business can be conducted by an accountant or an attorney if the attorney is experienced in the industry of the business and has a background in accounting and finance. The company's financial condition is a big part of the report. Either professional can prepare a short due diligence report consisting of approximately 10 pages.

The due diligence report starts with an executive summary that contains the name of the person who conducted the study and the name and position of the person who asked for the study. The executive summary will outline the steps taken to conduct the study. The executive summary will also list the documents and other items reviewed during the study. Finally, the executive summary will present an overview of the findings of the study.

The due diligence study contains the biography and credentials of the person who conducted the study. The report will outline the steps taken during the study, and the report will describe the specific areas of the business that were part of the study. For example, the report will discuss the company's history and the company's management. Other factors considered are the company's background, the culture and goals, the business strategy, any business awards, media attention, and indications of growth.

In considering the company's culture, the report will state the mission statement and a description of the business model. In considering the company's growth, the report will list gross revenue, industry rankings (if available), number of offices and locations, and any other relevant financial information. The report will address the last 3-5 years of the company's operations.

If there are key indicators of the company's growth such as new offices opened or new technology installed, the report will give that information. If the company had media recognition, the report will give that information also. If the company has been involved in litigation, the report will describe each lawsuit and the outcome. This is usually the concluding portion of the due diligence report.

Jo Ann Joy, Esq., MBA, CEO, Indigo Business Solutions Copyright 2006 by Indigo Business Solutions. All rights reserved. Indigo Business Solutions is a registered trade name.