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One of the things every business buyer fears is it really “what you see is what you get.” While 99% of business sellers are honest in what they present, there is always the fear that the seller is holding back something.

Just look at the recent headlines about H-P, they took an $8.8 billion charge because they say (not proven) that they were duped on a 2011 acquisition. If H-P, with their teams of MBAs, financial experts and acquisition pros, can be duped, doesn’t that mean it’s easier to dupe an individual business buyer?

Actually, no. Because most small business owners are honest, don’t invest in deception and as they usually finance part of the deal it’s easy for the buyer to get back at them. In fact, in all my years working on buy-sell deals I’ve only seen a couple acts of deception (not counting when we ran, fast, from the owner who said, “do you want to see the real books or the ones I show the IRS”).

A buyer has to follow a proven due diligence plan and look under every rock. If they do so, they maximize the chances of finding out things about the company the owner didn’t know or things that had become so routine that he or she doesn’t think about them anymore. I’ve seen more cases of buyers being surprised by good news than bad, post-sale.

Performing adequate due diligence is the key, no matter how nice and trusting the seller is. One of the cases of deception I mentioned could have been avoided if the buyer had taken the advice of his attorney and me and not fallen for the seller’s line about why he, the buyer, couldn’t talk to the key customers. Those conversations would have killed or materially changed the deal, but he was enamored with the business and didn’t want to disrupt anything. Those feelings he had are also called “buyer fever.”

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