The Due Diligence Step Most Buyers Skip

Hey oh, Acquire & Build crew! Your weekly biz buying newsletter that helps you find all the skeletons in the closet so you can marry that business with confidence.

This week’s skeleton to avoid:

1. The Due Diligence Step Most Buyers Skip (Until It’s Too Late)

The Due Diligence Step Most Buyers Skip (Until It’s Too Late)

Hey, Acquire and Build crew!

This is the most overlooked part of due diligence.

A little story from the trenches of due diligence.

We just wrapped up a 30-day deep dive on our latest acquisition target, and here’s the big takeaway:

Getting a solid “industry thesis.”

What’s that in normal human speak?

Making sure that industry you are about to marry doesn't have any skeletons in the closet (and what her mom looks like 😜 ) before you tie the knot.

Where's the whole industry headed—growing, shrinking, getting disrupted by tech, or maybe just staying steady.

Basically, you’re not just looking at the business; you’re looking at the neighborhood it lives in.

Now, aside from the usual financial and legal due diligence…

yeah, the part where you get your accountants and lawyers to pick through the numbers and contract…

you also want to do a bit of what I call…

“market due diligence.”

This is the fun part where you actually get on the phone, talk to customers and other owners in your market or other Metro areas so they don't feel comfortable sharing the tea, and figure out the lay of the land.

In our case, I phoned a bunch of general contractors (and other shower door installers) to see if they actually handle custom shower doors themselves or if they sub it out.

Turns out, pretty much all of them outsource that part, which is great news for us because it means there’s a steady stream of business waiting.

Plus, a lot of these GCs are itching for a new supplier—so we might have just found ourselves some future customers even before we’ve closed the deal.

And the cherry on top: despite all the high interest rates and housing craziness, the remodeling market’s still looking strong. People aren’t moving; they’re just upgrading their bathrooms instead, and guess what’s almost always in that plan? Yep, a fancy new shower door.

So, there you have it. The moral of the story is: do your market homework, talk to real folks in the trenches, and you’ll walk into your acquisition not just with a business, but with a whole lot of confidence about the road ahead.

Happy deal hunting!