334 - Is Integrity Important To You? How Important?

0:00This is podcast number 334, a reminder that time certainly does fly. Boy, 334. More than six years, almost six and a half years. A reminder to all of us that time is fleeting. Another thing that in some cases is fleeting is integrity. And I wanted to talk about just how important that is to what you're doing in business acquisition and give you some thoughts on that. So first, you know, what is integrity? Well, it certainly is a definition you need to understand and hopefully a core value. But integrity means acting with honesty, consistency, and ethical principles. Determining those is sometimes a challenge.

0:48Trust and credibility is critical as part of that. And aligning your words with your action builds both personal and professional trust, which is super important in this process. And then accountability, you know, certainly the importance of owning mistakes and learning from them. I've said many times you will fail your way to success. So let's talk about integrity in business acquisitions. First, let me give you some points and then give you some thoughts on them. Transparent dealings. It is really important to be clear and open in your communications and a full disclosure guy. I always say I'm a full disclosure guy.

1:34You know, I don't and have found that if you hold things back, they come back to bite you. But they are the key to reducing risk during acquisitions. Due diligence. Explain, you know, that certainly to those around you that are doing this and to yourself that this is a commitment to ethical practices and ensures thorough evaluation and fair negotiations. Do your due diligence. Don't skip over things, but do it fairly and with integrity. Oftentimes, you find that people hide things, just not the way to do business. Long-term relationships, that's what you want. So integrity builds reputational capital, which is vital for sustainable business growth and future opportunities.

2:26As we'll talk about in a second, it doesn't take very long to destroy a reputation. Reputation multiplier. If someone intends to pursue multiple acquisitions, and I'm assuming that probably means you, every transaction compounds your reputation. And it does take years to build a solid reputation and only minutes to destroy it. It's incredible how fast you can destroy a reputation that you've spent decades building. So maintaining integrity is really essential for long-term success. So why is integrity not only crucial, but why is it really crucial in seller-financed acquisitions, which is probably where you want to spend most of your time?

3:15Can you use banks? Sure. But seller-finance, if you can get that done, is going to get you to the goal line and with less risk. And so I would encourage you to use that as your first pitch. So certainly you're going to need an added trust factor. In seller finance deals, the seller essentially becomes the creditor. Not really essentially, they do become the creditor. And emphasize that this requires to them and to yourself and your team an even higher level of trust between both parties. You really need to build trust with that seller. And how you start from the beginning, super important. Under-promise, over-deliver, have clear expectations, be a full disclosure guy.

4:06Okay, speaking of disclosure, clear financial disclosures. You know, honesty about financial health and risk assessments is non-negotiable, and you should view it that way, to prevent future conflicts. And then have aligned interests. You know, integrity ensures that both the buyer and seller are transparent about their expectations, and that can lead to mutually beneficial outcomes. Most of the time, you're going to do a 60-40 deal or an 80-20 deal. So this seller is not someone who you're going to buy someone and they're going to walk away, and that's the last you'll ever deal with them. They will essentially, if not in reality, be your partner.

4:47So treat them that way and expect the same from them with respect to honesty and integrity. Contractual honesty, certainly adhering strictly to what you agreed upon in terms reinforces trust and minimizes potential disputes later on. One of the things to look for is people who say what they're going to do actually put it in writing and then for whatever reason decide not to do it. I remember back in my corporate days when I did a lot of work with Detroit in the automotive industry, I had someone who worked for me that wrote a piece on integrity in the automotive industry. And he said, they have integrity when economically they can afford to have integrity.

5:38And I thought that was so spot on with the way they conducted business. When they were going, General Motors was going through a downturn years ago, the new person who came in basically ripped up all the long-term agreements with suppliers and said, we're going to start all those new. so didn't honor what was previously said. Did that make people wonder about their integrity? Sure as hell should have, certainly. So when you say you're going to do something, even if it costs you money, follow through. You'll get a reputation that, well, you know, with respect to so-and-so, boy, you better be really careful there because I had a deal with him or her and they ended up breaking it.

6:23Or I've had deals with that person and we had situations that really were not favorable to them, but they followed through on what they said they were going to do, even though it, you know, I'm sure cost them money. You want that kind of reputation, that your word is your bond and people can count on it. And I do think that a lot of people think, well, I'll do that until I can't afford to do it. And literally, I've had people say to me, well, you can say whatever you want. If you want to say I'm breaking my word, yeah, I'm breaking my word. I'm breaking what I wrote, but that's what I'm going to do.

7:00So how someone can do that and not understand morally and ethically what that does to their reputation? No. And I have certainly had people that have broken their word to me and I have either taken action legally against them or I've said no matter what you say, I'm not going to do business with you going forward because those things are paths for me that you can't come back on. You can't go back across that line once you've broken the integrity part of it. So I hope that you appreciate how important integrity is in your business acquisition dealings and how important it is for your reputation, which ultimately is what is going to allow you to continue to do more than one deal and thrive in this environment of business acquisition.

8:01So I hope that helps. Depending upon when you're listening to this, I am about ready to launch the Acquisition Advantage Bootcamp 2025 edition. Tons of new things from the previous one back in 2023. and so that would help you. In addition, those people will be able to attend a monthly live Q &A with me, which I think has value, at least that's what I've been told, and keeps you current with that for the most part. So you should be getting emails on that. If you're not getting my emails, go to brucewhipple.com, grab the free report. That'll put you on the email list. I do a podcast, this one, each week, and then a video each week, and usually some emails in between.

8:50So I hope that all helps, but remember the importance of integrity. It will serve you well going forward.