If You’re Buying Your First Business, Read This Before You Do Anything Stupid(er)
How I’m making sure buying my first business doesn’t ruin my life
I’m at the starting line.
No deals closed. No victory lap. No “I bought this company for 3x SDE and 10x’d it in two years” story.
Not yet.
Right now, I’m the guy with a stack of books, a mess of notes, and a very real desire to buy a business without lighting my life on fire in the process. So instead of pretending I’ve got it all figured out, I’ve built something simple and brutal:
A scorecard.
Not a fancy spreadsheet to impress bankers.
A straight-shooting filter to keep me from buying trash, overpaying, or accidentally “acquiring” a 60-hour-a-week job I grow to hate 👀.
Let me walk you through how I’m planning to screen my very first deal - like I’m talking to you in the gym between sets.
Pssst …. don’t forget to read ‘til the end to get this (or just scroll down there now you impatient person haha)
The 5 Pillars of My Deal Scorecard
1. Cash Flow:
The Only Story That Really Matters
Every seller has a story.
“It could grow so much if someone just did marketing.”
“We’ve never really focused on sales.”
“There’s huge potential.”
Cool. Love that for you bro.
But I’m not buying “potential.” I’m not buying vibes.
I’m buying mf’n cash flow.
Since this is my first acquisition, I’m treating cash flow like oxygen:
No oxygen, no deal.
Weak oxygen, smaller deal.
Strong oxygen … in the word of the King Ronnie Coleman “YYYYYEAH BUDDY!”
Here’s what I’m planning to dig into:
I’ll calculate SDE myself, line by line (I’ll dive into some numbers on one I’m already looking at in a future newsletter).
I’ll question every add-back like a paranoid detective.
I’ll run the numbers as if the business never grows another dollar.
Because if the past performance can’t pay tomorrow’s debt service, I’m not stepping into that boxing ring. I’m not experienced enough yet to bet on a “turnaround miracle” as my first at-bat. And if you’re in this boat, I would encourage you to do the same … or not do it … you get the point.
I need a business that can carry its own weight from day one and pay the loan that bought it AND AND ideally, pay an operator so I can focus on the biz shiz.
2. Transferability:
The “Hit-by-a-Bus” Test
Here’s the nightmare scenario I’m trying to avoid:
I buy a business. The owner rides off into the sunset.
And I discover the “business” was really just him and his 17 years of duct-taped systems inside his head.
I don’t want that. Not on my first deal. Hell, I can’t think of anytime I would want that.
So I’m going to ask one brutal question:
“If the owner got hit by a bus tomorrow, what would actually happen here?”
If …
The customers only trust him
The suppliers only answer his calls
The team only listens to his orders
(Yes I’m using him right now - simmer down feminists)
Then I’m not buying that fkn company. What it really is, is me buying a ghost I’ll be chasing for the next two years.
My 3yo hates ghosts. No matter how many times I tell her they’re not real.
On deal one, I want:
Documented processes
A team that knows what they’re doing
Systems that exist → outside the owner’s skull
It doesn’t have to be perfect. Actually, I’d rather it not be, b/c then it’s going to be too expensive for me right now haha.
But it needs to be transferable. I refuse to let my first acquisition to be a hostage negotiation.
3. Growth Opportunity:
What Would Need to Be True?
Here’s where my entrepreneurial brain wakes up.
I know myself:
I like systems, optimization, maximizations, automation, and fixing operational stupidity. If I see a manual spreadsheet, I start thinking in workflows and triggers. I can’t help it 🤷.
So when I look at a target business, I’m going to ask:
Where’s the slack in this system?
What’s obviously broken but ‘easy’ to fix?
What would need to be true to double this thing in 3–5 years?
And then the most important question:
“Why hasn’t the mf’n seller done that already?!”
If their answer is:
“I’m tired.”
“I don’t want to grow anymore.”
“I don’t understand tech.”
That’s workable. That’s opportunity 🤩!
If their answer is hand-wavy or defensive? That’s a landmine.
For my first deal, I’m not trying to be a hero. I want clear, boring growth levers:
Improve the pricing
Add basic marketing
Tighten ops
Fix obvious churn issues
Automate stupid repetetive shit
If I can’t see the plan in my head in 10–15 minutes, it’s probably not my deal.
4. Industry & Trend:
Boring, Eternal, Necessary
I’m not looking to buy the next shiny tech rocketship. Far from it.
I want unsexy, necessary, basically almost invisible.
Stuff like the trades (plumber, HVAC, roofer, etc.). Services everyone uses but nobody thinks about. Industries that never stop - you’re going to fix your plumbing if a pipe breaks.
I’m also not betting my first acquisition on an industry that’s dying or getting eaten alive by Amazon and automation.
I think of it like this
I’m not out here trying to buy a DVD rental store in the age of Netflix.
I’m not about to acquire a mall photo printing kiosk when everyone’s got a 4K camera in their pocket.
And I sure as hell am not putting my life savings into a local bookstore the same year Amazon is dropping same-day delivery like it’s nothing ( When I’m wealthy enough, I’ll 100% be dropping cash into a dope ass man bookstore though - Leather, gym, dark wood … I can smell it )
If Amazon can crush it with one press release, or if a robot can learn the job in a weekend, it ain’t for me brotha!
I want something boring, needed, and stubbornly human. Ya know, the kind of business you can’t digitize, outsource, or ship in a Prime box.
I think you get the picture haha.
So before I get too excited about any business, I’m going to research and ask myself:
Is this industry growing, flat, or declining?
Is demand stable or trendy?
Could a policy change, tech shift, or giant competitor crush this thing overnight?
For deal #1, I want:
Simple business model - I’m an engineer. Complex is my nature lol. I don’t want it here!
Clear customer need - You absolutely need to wash your damn clothes!
Slow-moving competitive landscape - Dinosaurs … rawr 🦖
I’m aiming for steady stream, not whitewater rapid. I’m still learning to paddle.
5. The Seller:
The Human Variable
This might be the most emotional part of the whole thing.
On the other side of every deal is a human being. Startups / Biz owners treat it like tehir babies. I know I sure did.
They’ve spent years building this thing. They’re probably exhausted (ideal!). They’re scared of being ripped off. And they’re trying to cash out without feeling stupid.
I’m not only potentially buying their company, I’m going at it it like I’m stepping into their story.
I’m approaching this first meeting like I’m interviewing to become the new caretaker of their life’s work. I’m selling myself just as much as they’re selling their biz.
Some things I’m watching for:
Are they honest about weaknesses?
Do they flinch at hard questions?
Are they emotionally ready to sell?
Do their answers stay consistent over time?
Do I like them? Do I trust them?
If my gut says, “Something’s off,” I’ll be listening.
First deal ( and honestly, probably an every deal ) rule for me:
If I don’t trust the seller, I won’t buy the business.
How I’ll Actually Use This Scorecard
( All the tactics and the scorecard itself you can download below! )
This is where the real game begins.
The part nobody teaches you.
The part I wish someone handed me on Day 1.
These aren’t generic MBA questions. These are the exact questions that expose lies, reveal hidden risks, and show you whether the seller is full of shit… or if the deal is actually a gem.
If you use these questions, you won’t get blindsided. If you skip them, you absolutely will.
Here’s exactly what I’m going to ask the seller (word-for-word):
