Commercial Due Diligence

Customer interviews, customer concentration, market validation, competitors, pricing, pipeline quality and market growth, verified from sources the company did not choose.

Is the demand real, and will it last?

Lessons

• The customers you find yourself tell you more than the ones you are given — Customer calls are the most direct evidence of demand. They are most useful when they ask about past behaviour and include customers the company did not choose. (10 min)
• If one customer can leave, measure what leaves with them — Customer concentration shows how much revenue depends on a few customers. Measure the share of the largest customers and what happens to the business if one leaves. (9 min)
• A market is the customers you can name, times what they will pay — Commercial diligence tests market claims by building them from countable customers and realistic prices, then checking the parts the company can actually reach. (10 min)
• The real competitor is often a spreadsheet or doing nothing — Competitive diligence maps every alternative a customer could choose, including internal tools and inaction, and uses win and loss data to see where the company actually wins. (10 min)
• The list price is a claim; the realised price is the evidence — Pricing diligence compares list prices with what customers actually pay, checks discounting patterns and looks for evidence that customers would accept higher prices. (10 min)
• A pipeline is worth its probability, not its headline — Sales pipelines are presented at full value. Weighting deals by stage, checking historical conversion and removing stale deals shows how much revenue is realistically coming. (10 min)

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