It’s the smart way to making decisions early on whether or not the business is of interest and whether or not its worth paying 3rd party advisers for their views.
The physical nature and environment of a business largely governs;
- Where it has been and why;
- Where it is now and why; and
- Where it is going in the future and why.
The physical nature of a business to be investigated includes its demographics, industry, economy, location, premises and lease arrangements, employees, products and services, customers, suppliers, stock levels, competition, compliance and insurance matters, and management structure, systems and processes.
Once the risks that the physical nature and environment of the business have on its future outlook are understood, then the risks associated with it future profit levels can be judged. Thereafter, decisions on whether or not to proceed can be made with a more complete understanding of the business and its future prospects before incurring costs before they are really necessary.
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