The Perils of Due Diligence
I’m frequently asked about due diligence, which is the routine process of confirming everything a buyer is told and shown initially when considering the acquisition of a harness company. While this process is standard, all companies go about this information gathering differently. The process is usually quite demanding. But it’s much smoother if a seller never asks the following two questions when confronted with a request.
- Why do they want that information?
- I already communicated this.
As a buyer moves through the diligence process it’s his right to request any information he needs to confirm his decision– in any format. Asking why a buyer wants this information is not productive and can waist time. Even though a seller might think he previously answered a question or provided the requested material. an answer is still needed. The failure to provide timely cooperation by asking questions like these can sour the process.
Due diligence is not fun but doesn’t have to be unpleasant, and unless information requests are greeted with “no problem”, I’ll get back to you”” the process can be very wearing.
Despite my early warning, occasionally a harness owner will greet information requests with one or both of these questions. When this happens, the process can quickly become confrontational it can even spin out of control and become adversarial, making it much harder to get to a closing.