But effective due diligence is complicated. The plethora of regulations, massive amounts of siloed or difficult-to-access data and complex processes can be daunting…and even more so when it comes to small business partners. They don’t have the same data footprint as large businesses. Hidden or missing information adds to the complexity. It can be especially difficult to get data on small and mid-sized businesses. You need to assess both the business and the people running the business to avoid a risky partnership.
You need to know about your business partners’ finances. Are there any derogatory events in their background? You need to make sure they’re in good financial standing and that they have the resources to meet your needs.
Raj is working with LexisNexis Risk Solutions to proactively manage risk and partner with the right small business suppliers. He can get a 360 degree view of all his partners to stay on top of regulatory, financial and reputational risks. By being proactive, Raj can detect problems early and quickly intervene to:
An effective due diligence program can minimize supplier risk and allow you to evaluate business partners and vendors more quickly, efficiently and consistently. Small businesses don’t have the same data footprint as large businesses. This means Raj needs to leverage alternative data sources to get all the information he needs to fully assess a partner. And that process includes vetting the small business owner(s) as well. While business information is public domain, personal information is harder to find.
An important part of a due diligence program is ongoing monitoring. A partner may be perfect when you onboard them, but things can change over time. In 2018, more than 89,000 U.S. companies filed for bankruptcy. If one of them were your supplier, would this have been on your radar? Ongoing monitoring keeps you in the know about your business partners and helps ensure your company won’t suffer from any unexpected surprises. You can implement regular, automatic checkpoints to ensure you’re on top of any changes that might have an adverse impact on your business.
Contact us to learn about the tools we have to help you minimize the risk of your vendors, partners and suppliers. You can gain an edge with our market-leading due diligence capabilities:
This information is for educational purposes only and does not guarantee the functionality or features of LexisNexis products identified. LexisNexis does not warrant this content is complete or error-free.
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