Next step when you are recommending No-Go

Question

What would be a good next step to say in situations where you are recommending a client to not go ahead for financial reasons ..I.e it's not a financially viable move for client? For eg should you sau you'd like to evaluate other options (could be anything - markets/deals/acquisition targets) that would be more profitable? Or is it better to say you'd like to explore ways to improve current profitability further (of deal/market entry/acquisition target etc) to make this a good option for the client?

Any other next steps?

Answer 1

Hi there,

This is really case-specific!

If they're looking for growth for example, you might call out other areas of growth for them to look into. If it's an investment or M&A and you were just short of the target, you can propose that they look closer at x assumption/number or look for x additional value/synergies.

But yes, in summary, you can propose looking deeper into what's been analyzed, you can propose looking into other areas of analysis that might help, you can propose finding other ways to meet the client needs, etc. etc.

Answer 2

This is a question that you'll need to tie into the objectives of the client and therefore is case specific. An example: If this is about a PE firm and the target is not profitable, then it's your job to expore ways to increase profitability during the case. If this is about acquiring capabilities for a corporate client and you conclude this is not the best target than they should look at different ones.

Answer 3

Hi there,

As mentioned by Henning and Ian, this is case-specific. In general, both the options you mentioned (look at different alternatives or additional analysis of XYZ to improve the financial metric) could make sense and are totally fine as next steps.

Best,

Francesco

Answer 4

I will recommend the client not to go ahead because of xxx..

However, if the clients still want to go, following needs to be considered.

1. XXX 2. XXXX 3. XXXX

The risk will be xxxx