"The car under the dealership's lights is shiny. The salesman is a smooth talker. Your instinct is "This is the right car for me." This is where business people get into trouble, not only with cars, but with hiring and business partnerships. First impressions can be dangerously misleading, and emotional decisions rarely hold up under scrutiny. The car that looks good and is polished is almost always hiding some mechanical failures, rust and poor accident history."
"Due diligence isn't just for big deals. It's a mindset that reveals itself in every decision you make, even mundane ones, like buying a secondhand car. In business, like in car buying, you must define what you're actually buying, inspect before committing, verify claims and assumptions, ask for documentation and structure expectations early. The most successful entrepreneurs turn due diligence into a habit. They also know when to walk away from bad opportunities."
Due diligence extends beyond mergers and high-stakes deals to everyday decisions, shaping a disciplined approach that prevents costly mistakes. Surface appeal and charisma often hide risks; first impressions and emotional choices can obscure mechanical, financial, or partnership problems. Effective due diligence requires defining precisely what is being acquired, inspecting thoroughly before committing, verifying claims and assumptions, requesting documentation, and setting expectations early. Practicing these steps in low-stakes situations builds reliable habits and decision patterns. Successful entrepreneurs institutionalize due diligence as routine behavior and maintain the readiness to walk away from opportunities that fail verification or present unacceptable risks.
Read at Entrepreneur
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