Municipalities and organizations representing towns, cities, counties and states actively court businesses around the globe to come set up shop in their locales to boost jobs and revenues. When a business from another state or country indicates interest, there is a lot of excitement.
However, the potential for consummating a deal has to be tempered by reason. Often that reason extends to a due diligence checklist involving the financial soundness of the business. It should also include a due diligence investigation regarding the business and the executives personally running the business.
Your parents might admonish that you are counting your chickens before they hatch if you are part of one of those organizations and don’t perform due diligence to understand who you are inviting into your area.
For example, a state organization created to promote economic development in a region came to International Investigators, All In Investigations, Inc. in the course of their due diligence process. The organization was offering to provide significant financial assistance in the form of grants that did not have to be repaid in order to entice businesses to relocate their operations in the targeted region.
As we went about providing comprehensive due diligence services regarding one of the grant applicants, International Investigators uncovered information about the foreign business in its home country. It wasn’t so much the business as it was we discovered that two of the three principles of the applying company had serious personal financial problems at home.
Once the facts were provided to the organization leaders, the issues were brought up with the applicants. In the end, the grant application was denied.
If the granting organization had not been comprehensive in their process to conduct due diligence, the result could have been the loss of the funds granted to a foreign business and a loss to the community. It is not uncommon for dishonest business people to try to dupe municipalities and the organizations that represent them.
So, while finances are being reviewed closely, be sure to also complete a review similar to an HR due diligence checklist. Take a very close look at the people behind the business. That’s when International Investigators can help with comprehensive due diligence services.
-T. Wilcox, CEO, International Investigators
-B. McGinley, Director of Operations, International Investigators