Do Due Diligence By Going to The Bathroom

You can do due diligence by inspecting a business’s common areas, like the bathroom and employee break areas. Observing common areas may have little to do with the operation of a company but can be revealing. It can offer insight into company leadership and how employees are valued. The premise is that a clean and well-appointed common area suggests a company is better run than companies with lesser appointed and maintained common areas. You can have excellent common areas and a lousy company or poorly maintained ones with an excellent business. This approach is meant to be used with other corroborating information and questions.

What Do Bathrooms and Break Rooms Say About a Business?

Break rooms, bathrooms, and other common areas that are lacking may also be an indication of potential. Operations may be run quite well, but the attention to common areas may need attention. Generally, poor common areas suggest weaknesses in other areas. A company’s weakness may be potential areas to improve and make the business better and more profitable. Traditional supporting information like profit and loss statements, balance sheets, tax returns, and supporting documents must be reviewed before concluding. This is a simple way to look at a business and gain insight into the condition of the enterprise. It’s surprising how much information can be gathered through simple observation. This isn’t a substitute for due diligence but another input in your overall review of a target company.

Other Due Diligence Considerations

I am not suggesting that you reject businesses because of a messy breakroom or bathroom, but it is an indicator. Also, look at the parking lot and conference room to get a feel of where the priorities of the company are.  Take note of where the executives of the company park. Is it an assigned space with their title painted on the pavement, or is it on a first come basis. This gives some insight into the management style and company hierarchy.

Consider this “subjective” approach like a polygraph; not admissible in court but an excellent tool to guide your investigation. Well-appointed break areas, bathrooms, and common areas show the non-financial qualities of a company. It shows a company that values company morale, employee appreciation, a happier workplace, and employee retention. A good company is more than quarterly profits. A good company treats employees, customers, and suppliers like partners for sustained economic performance. Consider subscribing to my newsletter and joining a community of entrepreneurs helping each other reach business goals.