Outsourcing Corporate Development
Most small and medium-sized businesses should consider outsourcing corporate development. They do not otherwise have the time or resources necessary to prepare and plan for the future. They are continually caught up in the details and demands of day-to-day operations and so they are at high risk of flying blindly into uncertainty and into costly and unpleasant surprises.
Corporate development is a must for not only future growth and profitability, but in some cases it ensures survival. In many cases, the only way to engage in critical corporate development is to seek outside help. There may not otherwise be the time or expertise available to take on the bigger picture business activities. Considerations such as planning, pricing, costing, financial analysis, merger and acquisition preparation, due diligence, budgeting and other critical tasks cannot safely be neglected.
What is Corporate Development?
Corporate Development, as succinctly stated by Wikipedia, is “the planning and execution of strategies to meet organizational objectives.”
What is Outsourcing?
Outsourcing, in the case at hand, is the hiring of consultants, experts, and contractors for a particular purpose. They are not employees, but they may be experienced CEOs, CFOs, directors, CPAs, attorneys, or experts in the various aspects and elements of corporate development.
Corporate development activities include but are not limited to:
- Identifying, qualifying, and acquiring another business
- Merging with another business
- Identifying, qualifying, acquiring asset and real estate acquisitions
- Establishing joint ventures/partnerships/strategic alliances with other businesses
- Selling/divesting select assets/divisions to other businesses
- Developing immediate/short/long term executable strategies for all areas of the business
- Recruiting of management
- Phasing in or out of markets, products, services
- Securing corporate financing
- Managing intellectual property
Where to find Corporate Development Experts
Trusted professionals are a favorable referral source for finding and retaining corporate development experts. In most cases a small or mid-sized business has already hired or retained various experts such as tax preparers, auditors, or attorneys. These professionals are a very good referral source for finding a number of different experts to help with corporate development needs. Additionally, contacts in the same or similar industry may be a good referral source. For instance, should a firm be seeking to expand its product offering or geographical presence by acquiring another company, best referrals will likely come from recent successful acquisition stories in the same industry.
Types of Corporate Development Experts
Generally speaking, the best corporate development experts are those with experience and success stories to tell. Unless a specific and very technical skill set is required, an acquisition can be managed in many cases just as well by an experienced accountant or by an attorney or executive. For instance the attorney, if selected, will seek accounting guidance when it is critical, and the accountant will seek legal guidance when it is critical.
How to Vet Corporate Development Experts
There are at least three recommended must haves before deciding to hire an outsourced Corporate Development expert. First, reliable references or success stories are critical. Proven performance and good reviews from former or established clients are a must. Without them, a business could be subjecting itself to expensive but poor guidance. There is no proof of prior performance. Second, resumes should always be requested and vetted for authenticity. Education, licenses, and work experience are spelled out and provide information critical to doing due diligence on any anticipated hire. For instance, the resumes of CPAs and attorneys can be cross referenced via State Boards of Accountancy or State Bar Associations’ web sites. Is the professional listed as active? Have they been disciplined? These are a few questions to be answered. Finally, a litigation search disclose how likely a contemplated hire is to be argumentative, hard to work with or litigious.