Very recently, we carried out a due diligence in a foreign country, for a company that wanted to establish itself there. From the start, we took care to establish a solid game plan. We share the initial framework with you. For the entrepreneur in me, it was a very enriching experience.

Here is our framework

1. Team working . Because everyone’s experiences and knowledge will make the verification a success.
2. Meet your Canadian strategic partners (bankers, EDC, IQ, credit lessors). Tell them about your desire to set up in a foreign country. The advice they offer to entrepreneurs will improve the financial structure of your business plan.
3. Find as much information about the country as possible (laws, conventions between countries, entry barriers, etc.) in order to prepare yourself well.
4. Use tools developed by large accounting firms, for example “ Doing Business in ABC ” from Deloitte or PWC . The Export Development Canada website which offers a wealth of information on countries in the “Country Info” section.
5. Identify and do business with recognized professionals (lawyer, accountant, tax expert). It is necessary to work through your Canadian partners to identify the best professionals. Don't be afraid to pay a higher price, because the service provided is definitely worth it.
6. Identify and meet with your Canadian strategic partners who are based in the foreign country. For example, EDC, the industrial commissioner of the Canadian Embassy or the government of your province, etc.
7. Prepare a “to-do list” which will be very useful in preparing for the audit. Identify the steps to take Before, During and After the verification.
8. On your return, keep in touch with the professionals and local partners who were met. Above all, do not forget to prepare a mission report, because it will be very useful when necessary.
9. Also, when you have made the decision to invest in the country, identify the Canadian manager(s) of the project. This person will be responsible for the proper functioning of the implementation project.
10. Revise the initial business plan and forecast to include the results of due diligence.

And yes, an 11th step. In a timely manner, validate business plan assumptions. Revised and financial results compared to forecasts. Return to the site to ensure everything is working as expected.

In conclusion

Doing due diligence for a contractor is no easy feat. Good preparation, giving yourself time, trusting your instincts are a guarantee of success. Teamwork will make it possible to overcome all obstacles (envisioned or not) and as a result: undeniable success.

If you would like to share your thoughts on this article, simply reply to this post or email us at  info@6dt.ca. We look forward to reading your comments.