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Protecting Your Small Business from Internal Threats with Due Diligence

Lance Guillory
March 30, 2024

We know that your small business is your passion project. It's that coffee you skipped to rush to a meeting, the family dinner you missed to balance the books, and the vacations you postponed for just one more launch. Every new hire you make into this built-from-scratch business is like handing over a key to a piece of your dream. What if that key ends up in the wrong hands? 

The consequences for you can be devastating. Fraud, embezzlement, theft, slander… these are serious insider threats that can tear down what you've built. That's why taking shortcuts in hiring and partnership is a no-go, and your duty of care as a business owner extends to thorough diligence when bringing any person or partner onto the team. Here's more on how we're conducting Due Diligence Investigations to fortify your small business against insider threats. 

Your SMB's Need for Due Diligence

Due Diligence Investigations identify potential liabilities you need to be aware of before entering into an agreement. Whether it be an investment opportunity, hiring a new employee, or purchasing another business, this information identifies many risks when it comes to security, along with insider threats.

Insider threats are dangers that originate from within an organization itself, unlike external forces, such as natural disaster or economic downturns. Insider threats manifest through the actions of employees, or someone with authorized access to your company, who intentionally or unintentionally causes harm to the business. 

The impact of these insider threats can hit you where it really hurts: Your finances. From theft and fraud to costly mistakes made out of negligence, the financial repercussions of a 'bad apple' can be severe. If their behavior crosses even further into harassment, discrimination, or violence, you're not just facing potential financial losses, but also legal liabilities, which are often expensive and damaging to your reputation. 

Our solution is a well-thought out, investigative process that's conducted prior to any hiring, new partnership, or merger/acquisition. This will keep you from entering situations like:

  • Employees stealing inventory, equipment, or cash.
  • Unauthorized copying or sharing of softwares, patents, or secrets.
  • Manipulating records or engaging in schemes to steal funds.
  • Deliberately damaging reputation or assets.
  • Using company resources for personal gain or inappropriate purposes.
  • Violating policies, procedures, or ethical standards.
  • Careless actions that compromise the security or integrity of the business.

How Do You Keep the Bad Apples Out?

Our first suggestion is to look beyond the resume. Due Diligence Investigations should be your new best friend and are a necessity. Look into criminal records, financial history, and all-telling references to be most informed about your newest addition. Testing for integrity alongside skills can also give you an idea into a candidate's moral compass. No test can predict the future, but they can give you a better shot at hiring a trustworthy and credible employee.

We always recommend using interviews to get to know the potential partner/employee candidate. Throw in real-life business and personal scenarios while you're in discussion, and see how they'd react. Sometimes it's not their achievements, but their approach to challenges that tell you they're capable and can be trusted.

Last, finding someone who fits the puzzle of your company culture is another line of defense against those who might not have the best intentions. Shared values are a glue that keeps everything together and when you share mutual trust and respect, this helps you keep lines of communication open.

Due Diligence Past The Onboarding Phase

Once you've got a new hire or partner on board, your job isn't over. Building a culture of openness and ethics is how you let your team know that honesty is valued, and that there's a safe space for voicing concerns. The aim? Create an environment where wrongdoers essentially have nowhere to hide. 

There's also no shame in reaching out for help. Lengthy checks and investigations, legal compliance, crafting the perfect interview process. These are specialties for a reason. Protect your dream with every tool available.

Due Diligence for Small Business Success

Cutting corners in hiring and partnership is gambling with your business's future, and let's be honest, the house doesn't always win. That effort and diligence you put into hiring reflects the love you have for what you've built. It's about ensuring that every new addition is not just an employee or partner, but a protector of your dream. So, take the time, do the groundwork, and watch as your business—and your dream—continues to flourish. Your passion project deserves that much.

Need thorough Due Diligence Investigations? Contact our experts today.

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