(Digital) Due Diligence
Over the past year, I have had countless conversations with business brokers. For the podcast, about what we do, and casual intro meetings to talk shop.
When the discussion turns to content creation, there are certain topics that always come up if we talk about what a broker could be sharing online.
One of them is due diligence.
Going to just take this from Merriam-Webster directly – it does a great job setting up the history and current use of the term:
“Due diligence has been used since at least the mid-fifteenth century in the literal sense “requisite effort.” Centuries later, the phrase developed a legal meaning, namely, “the care that a reasonable person takes to avoid harm to other persons or their property”; in this sense, it is synonymous with another legal term, ordinary care. More recently, due diligence has extended its reach into business contexts, signifying the research a company performs before engaging in a financial transaction. This meaning may also apply to individuals: people are often advised to perform their due diligence before buying a house, signing a loan, or making any important purchase.”
That’s a lot and also makes sense. I love the historical use – requisite effort.
(Which, if you are like me and don’t know what a lot of words really mean, requisite is defined as needed for a particular purpose (essential, necessary).
So it’s all about essential, necessary effort to avoid harm.
In every business you list, potential buyers will go through their due diligence phase with the goal of doing the right amount of research and digging to reduce the risk of harm as a result of buying the company.
But you probably already knew that. You live it in each transaction. You hope you uncovered enough of the truth from your seller to address everything a potential buyer is going to question. You may hold your breath a little during this phase until you get the all-clear.
Why would I be discussing due diligence?
Because what many brokers still don’t understand is that a business owner, on the hunt for a way to exit their business successfully (legacy intact, financial payout, keeping their employees employed, ensuring customers are serviced), is going to do their due diligence on the brokers that come up in their search.
A business exit may be the scariest thing that the business owner has done since they decided to take the leap of faith into starting the business itself. There is common knowledge about how it works, what it takes. The closest experience could be selling a house or a car. Yet it doesn’t compare in scale or scope to anything they have dealt with. You know that, they do not.
So, they need to reduce risk and harm. To their legacy. To their life savings. To their ego.
They are going to do digital due diligence.
They are going to research.
They are going to dig.
They are going to consume.
And if you think your ‘baby boomer’ demographic doesn’t look up things online, you are making a dangerous assumption.
You might be currently be doing okay in business without putting any effort into sharing digital content that others can find. But at some point, the smart business brokers who understand how humans work will have overwhelming evidence online that a business owner can find.
And in comparison, it will make you look weird and ‘missing’.
If we know that humans are risk-averse and doing all they can to stay in their comfort zone, then we realize that the change that needs to occur lies outside of what is known and safe. Risk and danger are lying in wait.
That is why due diligence is so important in business (and in relationships… Is this person I am dating a serial killer?).
And it’s why you must assume – in a good and paranoid way – that every business owner who wants to exit is going to do digital due diligence.
I recently listened to a podcast with Donald Miller (StoryBrand), and he talks about it, where the first phase is a curiosity – where someone is looking for something and their attention gets caught by a soundbite that makes them curious.
The second phase is enlightenment, where someone then consumes content, researching, and making the ‘court case’ in their mind about moving forward. Could be buying a car. Could be reaching out to you to discuss how you can help.
He says for the Enlightenment phase,
“you need YouTube videos, social media, case studies, whitepapers, LinkedIn articles, and all sorts of stuff so people can spend time with you to be enlightened about how it works.”
I call them digital breadcrumbs.
You must leave them everywhere so that when someone is in their research phase, doing it their way, they can find you and then consume so much of your wisdom that they come to hear your voice in their head before they ever meet you.
And make sure you are not being a self-centered human (which you probably are…since you are human, and we are all self-centered by thinking any of the following:
• People love case studies/white papers, because that’s what I want to read
• People hate podcasts, because I hate podcasts
• People aren’t on LinkedIn because I can’t stand social media
• People don’t read newsletters – no one has time for that, because (you guessed it) I don’t ever read email newsletters
Remember, it’s not about it. It’s about them.
Ultimately, it’s about getting them to uncover enough trust signals to be open to a conversation with you (And as I wrote about recently…where you need them to find you and not the low-quality business brokers out there).
Featured Podcast Episode
What does it take to build a business brokerage that is both successful and deeply connected to its community?
In the newest episode, I sit down with Jeannie Keen, CMSBB, LCSW, PMP and discuss the realities of business brokerage, client relationships, and helping business owners prepare for one of the biggest transitions of their lives.
Some of the key insights from the conversation:
Why exit planning should start years before a business is listed for sale
How strong relationships and trust continue to drive successful transactions
Where technology, AI, and automation can help brokers become more effective
The importance of understanding each client’s unique goals and circumstances
The best brokers understand that this business is about far more than transactions. It is about helping owners navigate major decisions with confidence and clarity.
If you work with business owners, advise entrepreneurs, or are considering a future exit yourself, this is a conversation worth listening to.
To hear the full story and more broker growth hacks, listen to the full episode now! https://businessbrokergrowth.com/podcast/
Until next time,
Jason
PS. Take the Digital Impact Assessment (free) →https://get.businessbrokergrowth.com/assessmentNL
