Firms have two ways to grow: organically, or by acquiring other firms. The first is safer and easier, but it takes longer. The second helps you grow faster, but it’s a path full of traps for the unwary. We estimate that about half of all mergers and acquisitions fail, in one way or another, because the people involved knew what they wanted, but didn’t do the due diligence required beforehand.
This path suits many founders and second-generation firm owners, for a variety of reasons. Unless you want to simply “take the money and run”, due diligence is every bit as important as it is in an acquisition program. And if that’s your strategy, you’re not likely to get the full value of your years of building your business.