How I Think About Reinvesting Profits vs. Taking Distributions
Every acquisition creates a choice: reinvest profits into growth or take distributions as cash. Over the years, I’ve learned that the right balance depends on stage, stability, and long-term goals. In this article, I share how I think about this decision, when I prioritize reinvestment, and when taking distributions makes sense for sustainability and wealth creation.
The Risks I Watch for in Owner Financing Deals
Owner financing can be a great tool for closing deals, but it comes with risks that buyers often underestimate. Over the years, I’ve learned to watch for hidden terms, repayment traps, and misaligned incentives. In this article, I share the red flags I look for in owner financing, how I structure deals to protect myself, and why discipline is key to using this strategy wisely.
The First Metrics I Study When Looking at a Potential Acquisition
When I evaluate a potential acquisition, I don’t start with lofty projections—I start with the fundamentals. Cash flow, margins, customer concentration, and recurring revenue are the first numbers I study to see if a business is healthy or hiding risks. In this article, I share why these metrics matter most, how I interpret them, and how they guide my acquisition decisions.
Why I Believe Documentation Is the Hidden Backbone of a Business
The strongest businesses I’ve acquired had one thing in common—great documentation. Systems, SOPs, and processes captured on paper or digitally make transitions smoother, reduce key-person risk, and create true scalability. In this article, I share why documentation is the hidden backbone of a business, how I evaluate it during due diligence, and why it drives long-term acquisition success.
How I Approach Pricing Power When Evaluating a Business
Pricing power is one of the clearest indicators of strength in a business. If a company can raise prices without losing customers, it tells me volumes about its competitive edge and customer loyalty. In this article, I share how I analyze pricing power when evaluating businesses, the signals I look for, and why it often determines how much I’m willing to pay in an acquisition.
Why I Always Verify Working Capital Needs Before Closing a Deal
Working capital can be the silent deal-breaker in small business acquisitions. If you don’t verify it before closing, you risk unexpected cash shortages that cripple operations after day one. In this article, I explain why I always verify working capital needs, how I assess the true requirements, and why this step protects both valuation and long-term stability in every acquisition I make.
The Role of Vendor Relationships in Business Value
Vendors are more than suppliers—they’re partners who directly affect stability, pricing, and scalability. I’ve learned that strong vendor relationships can add significant value to a business, while weak or concentrated ones can introduce hidden risks. In this article, I share how I evaluate vendor relationships in due diligence and why they’re a critical driver of long-term business value.
Why I Avoid Businesses That Depend Too Heavily on the Owner’s Personality
Some businesses look profitable but are really just extensions of the owner’s personality. When customers, employees, and vendors rely too heavily on one individual, the business often loses value the moment that person steps away. In this article, I explain why I avoid these types of businesses, how I spot signs of owner dependence, and what I look for instead to ensure transferable value and long-term scalability.
Why I Avoid Businesses With No Clear Succession Plan
A business without a succession plan is a ticking time bomb. I’ve seen deals collapse because there was no clear path for leadership or continuity after the owner left. That’s why I avoid businesses without strong succession planning in place. In this article, I share how I evaluate succession risks, why they matter so much, and how they directly impact valuation and long-term success.
The Importance of Employee Retention After a Business Sale
When a business changes hands, the biggest risk isn’t customers leaving—it’s employees walking out the door. Retaining key staff after a sale is essential for continuity, customer relationships, and cultural stability. In this article, I share why employee retention matters so much post-sale, how I evaluate retention risks during due diligence, and the strategies I use to keep teams engaged after an acquisition.
The Most Common Red Flags I Spot During Due Diligence
Due diligence is where the truth of a business reveals itself. Over time, I’ve learned to spot common red flags—messy financials, customer concentration, hidden debts, or unreliable vendor contracts—that can derail a deal. In this article, I share the warning signs I consistently watch for during due diligence, and why catching them early protects me from costly acquisition mistakes.
Why I Always Study Customer Concentration Before Buying a Business
I’ve seen too many businesses that look strong but rely on just a few customers for most of their revenue. That kind of concentration can wipe out value overnight if a single client leaves. That’s why I always study customer concentration before buying. In this article, I share how I analyze customer mix, why it matters for valuation, and the risks it can reveal during due diligence.