1. Due Diligence and Business Plans
Presenters:
Maria Nicolaou
Maria Sarantopoulou
3/11/2016
2. • Business Plans
• Financial Due Diligence
• Legal Due Diligence
AgendaAgenda
3. Business PlansBusiness Plans
A tool for entrepreneurs to thoroughly investigate the
factors that will have a bearing on the success of the
business. This can include a new business venture, or an
addition to an existing business.
A business plan will be used to enhance the ability of the
entrepreneur to secure financing by providing an
organized overview of the venture for lenders and
investors.
A tool to be used for trying to predicting the future of
your business
4. Required for financiers and investors
Review everything at once
Monitor Progress
Attracting Talent
The business plan is a tool which needs to be updated on a
continuous basis as the business idea will evolve, to ensure
that targets are being met or are being re-evaluated as
necessary.
5. Main parts of a Business PlansMain parts of a Business Plans
Areas of a business plan
Cover Page & Table of Contents
Executive Summary
Description of the business
Market research and analysis/Marketing
Management Team
Financial Plan
6. The Cover PageThe Cover Page
The cover page should consist of:
•the name of business;
•the main contact’s name;
•full address details;
•the client’s company logo; and
•reader confidentiality
The next page should be the
contents page
7. Executive SummaryExecutive Summary
The executive summary should summarize the most important part of the
business plan. As such it is important that this is the last part of the business
plan to be written.
Potential investors and financiers will frequently only read this part and as a
result this is one of the most important parts of the business plan.
You should remember to include in the executive summary, amongst other
things, the objectives of the business, its mission statement, and the keys to
success.
The executive summary should not exceed 2 pages.
8. Description of the businessDescription of the business
You should give a concise and fact-based description of the business,
what is does and what it is going to make it unique, competitive and
successful. You should describe any special features which will make
the business attractive to potential customers and identify primary
goals and elaborate on objectives.
Company Ownership
Location
Interior
Hours of operation
Products and Services
Suppliers
Service
Manufacturing
Management
11. How will finances be managed?
How will the firm be profitable?
How will good cash flow be maintained?
How will funding be raised?
Projected statements
Start up expenses
Seasonality
12. What is Due Diligence?What is Due Diligence?
Due diligence is an investigation of a
business or person prior to signing a
contract, or an act with a certain standard
of care.
It is the evaluation of a business
opportunity
It spans into past, present, and the
predicatable future
13. Confirmation that the business is what it
appears to be
Identify potential 'deal killers' - defects in the
target and avoid bad business transactions
Gain information valuable for valuating assets,
negotiatiating price etc
Verification that the transaction complies with
the criteria of the deal
15. Financial Due DiligenceFinancial Due Diligence
Verifying the financial information
Assess the underlying performance of the
business - are there hidden liabilities - up to date
with taxes?
Establishing and understanding a target firm’s
actual financial situation in the recent few
years
Forecasting its future financial situation.
16. Methods of Financial Due DiligenceMethods of Financial Due Diligence
Review
Analytical
Procedures
Interviews
18. Legal Due DiligenceLegal Due Diligence
Legal Due diligence is
-most common in M&A transactions (merger,
acquisition of a company or part of (minority or
majority) the shares, or a division, entering a joint
venture etc)
-equally important as the financial, tax, commercial
and IT due diligence
19. - Investigation: determining the legal status of the
target company (know the company, risks, liabilities,
commitments etc.)
-Analysis: assessing consequences of the acquisition
(impediments, restrictions in the process,
requirements)
-Evaluation: supporting the determination of the value of
the target company
-Final decision : take into consideration the findings and
draft accordingly the closing documentation
Legal Due DiligenceLegal Due Diligence
Why importantWhy important?
21. What to investigate
(indicative examples)
•Corporate status, shareholders, shareholding participations,
corporate structure, Minutes of the BoD and General Assemblies of the
shareholders, classes of shares, preferential rights, dividends paid and to be paid,
Articles of Associations –restriction on the transfer of shares
•Internal Regulations, Code of ethics, Corporate Governance Rules
•Intra group transactions
•Assets (real estate property, cars etc)
•Contracts (NDAs, Material Contracts (like with high amouns, impact on financial
status of the cos, loans, bond loans etc), Insurance Agreements, Standard forms
for sale of services and goods, supply contracts, IPR agreements)
•Securities (shares, bonds, debentures etc)
24. A few words about Eurofast
Eurofast is a regional business advisory organisation
employing over 200 people in South East Europe &
East Mediterranean.
Our team of professionals is capable of efficiently
addressing all client needs in one single meeting,
using one single language for all the countries in the
Region.