If you ask anyone who is successful how they did it, I guarantee their story would have some amount of failure or loss. Bad decisions or investments are bound to happen, but the best way to be sure about a decision is by doing your due diligence. By definition due diligence is: the care that a reasonable person exercises to avoid harm to other persons or their property and the research and analysis of a company or organization done in preparation for a business transaction. Webster’s definition is a good place to start but what exactly does due diligence mean in terms of civil engineering? Well, to answer that we had to seek out the advice of our Vice President and head of our development department, Mark Johnson. “To me; due diligence is gathering the information about a property needed for our customers to make a good decision about their investment however, every customer is different in the amount of information they need to make a good decision. It can vary depending on whether the project is a large shopping center, small retail pad site, multi-family development, or other type of development.” Due diligence is an important step in creating a strong customer relationship, it’s part of gaining their trust and creating a successful outcome.
Due diligence is not only important for our customers but our reputation as well. The research that goes into due diligence is to ensure a ‘triple win.’ That is, a win for our customer, the community, as well as our business. If due diligence is performed correctly, then we can claim that triple win and please everyone in the process. To guarantee due diligence is followed consistently and correctly our development department has a checklist. “We do have a checklist of the most common types of information that our customers need. We then verify the information they want and need for their specific project” Johnson explains.
But, their work doesn’t stop there, most of the time they work beyond this checklist. They want to ensure our customers are not only satisfied but impressed. Some customers are very specific, exceeding the details of our checklist, so meeting those expectations is important. In this case our development team must dig deeper for details and construct a new checklist. There are many components that go into this checklist and each step leads to critical information. “All the information is important. A property may need to be rezoned to meet the customer’s use. There may be environmental issues from past users of the property. There may be flooding issues. The list is long” Johnson points out. There is not one step more important than the other, and going over every aspect of the checklist is vital.
We care about due diligence because it gets us involved early in the project which allows us to give advice to our customer. Gaining trust and offering guidance builds strong relationships which helps cultivate strong communication, resulting in a successful job. But why should you care about due diligence? Well, collaboration with a civil engineer during the due diligence process can only warrant better results. They can find issues and problems with a property that the customer may not have thought about or seen. It’s the philosophy that two brains are better than one. That outside perspective can grant a second opinion which gives intel that one might not have accounted for. In the end this can prevent problems that can arise which can potentially save money for our customers in the long run.
“Example… We had a customer looking at a property, the seller was pushing a second piece of land in the deal and our customer wanted to make sure it would be a good investment. It looks like a great deal—the frontage was great, it was on a corner and seems to be a valuable piece of land. Our customer consulted with us and after doing some due diligence, we found out that it was actually in a flood plain and had a sanitary sewer running through the main part. The land would not be ideal to develop on and the customer would be left maintaining this property and in turn, would not be profitable. With the help of our engineers, our customer was able to avoid this headache and save money and time on a bad investment.”
Although due diligence is a beginning step in the process of development it can have a large effect on the outcome of a project if not done correctly. Sometimes you have to add sugar to lemonade from the bad lemons you chose, but doing your due diligence and squeezing the lemons first assures for sweet lemonade without extra work.