On a different note, the most important part of the due diligence process has to do with business ethics. Let’s face it, each business has its good and bad characteristics. In general, most people don’t have a problem extolling the positive aspects of their business. Having said that, business owners are more reticent in talking about the problem areas of their businesses.
Buyers of any business will expect to hear about the positive highlights about the business they intend to acquire. On the flip side, these same buyers are most interested in the trouble areas of the business being sold. Thus, as a seller you need to be thorough, honest and forward in talking about your problem areas. If you try to hide something or not give the full truth, the buyer will find out and they may walk away as they won’t trust you anymore. Don’t make this mistake. Be upfront, honest, thorough and frank about the areas of your business that need help.
In fact, if you start the courting process with the buyer by talking about areas that need help in your business, the buyer will trust you even more. Trust is everything when it comes to the M&A process. If you have trust between a buyer and seller, most obstacles can be overcome. If you don’t have trust, the process can come to an unexpected and abrupt end. In short, do all that you can to build and maintain trust with the buyer.
In summary, the due diligence process is a very important part to selling your agency. If you prepare ahead of time, the M&A process will go much smoother.
If you have any questions about the process of selling of an independent insurance agency, feel free to contact us at Ron Christopher Co., Inc. We have been matching-up buyers and sellers of independent insurance agencies for 10+ years and work across the US.