Before we dive in, a quick note:

I have a business called SMB Business Plans that I run with my partner Joe Thomas. We help write business plans for business buyers looking to take out SBA Loans to fund their acquisitions. We know exactly what SBA lenders look for in a business plan, so we can write up a plan that will check all the boxes. Check it out here.

I've worked with hundreds of potential buyers in the ETA space.

Not every deal is a good one.

And not every "good deal" is right for every person.

Today I want to run through a few of the lessons I've learned about buyers finding the right deal for them.

Matthias Smith, CEO - Pioneer Capital Advisory LLC @SBA_Matthias I'm not afraid to tell buyers when their deal sucks If your baby is ugly, it's ugly. You can't put lipstick on a pig. My reputation rides on deals going well post-acquisition. I don't care to make money only to have you fail. 8:34 AM • Oct 21, 2024 1 Retweets 12 Likes Read 2 replies

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• If you find yourself being indecisive about a deal, it's probably not the right one for you. In my experience, the buyers who have the most success post-close are the ones who are absolutely confident about what they're looking for. They know exactly what type of business they want to buy, they know what they want to offer for the business, and they know how'll they run it post-close.
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  If you find yourself being indecisive about making an offer on a business, it probably isn't the right deal for you. If you don't have certainty about wanting to do a deal, you're probably not ready to run that business.
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• Don't work with sellers who lie. If a seller brags about how they evaded taxes or cheated someone else out of money, I would walk away. You might think that no one would be so forthcoming about lying to others, but trust me - it happens a lot!
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• Don't buy a business with no accounting system. Everyone wants to buy an "old school" business that's run on paper, and add technology to make it run better. One of the downsides to finding one of these old school businesses is that sometimes they have zero accounting records. If the business you're looking at buying doesn't have Quickbooks or some similar accounting software, I'd look elsewhere for a deal. You simply won't be able to do financial due diligence without it.

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Matthias Smith, CEO - Pioneer Capital Advisory LLC @SBA_Matthias If your seller isn’t using @QuickBooks online or a similar accounting system, stop financial due diligence now and find another deal 10:55 AM • Oct 21, 2024 1 Retweets 31 Likes Read 8 replies

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• Don't buy a business if you think it will be "passive income". Running a business is far from passive income. You need to be prepared to put in a ton of work after buying the business. If you're not willing to do that, you should just forget ETA and buy some index funds instead.
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• Don't buy a business if you're looking for the "perfect" business. Many beginning buyers often come in with unrealistic expectations. They want a profitable business that's growing like crazy, with an operator in place, with great margins, no issues, and selling at 1x cash flow. It simply won't happen. I advise people to study the deals available in the market and adjust their expectations accordingly. And it's okay to walk away from searching if you're not comfortable with what the market is offering.

Thanks for reading!

Last Note I will be speaking at the Chicago Booth Kellogg ETA conference on Monday, November 4th and that tickets are still on sale. Get Tickets Here.​

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Disclaimer: The information in this newsletter is for informational purposes only and should not be considered legal or financial advice. Business buyers are encouraged to consult with their legal counsel and accountant to ensure the proper structuring of their transactions and to fully understand the tax implications of seller financing.

Thanks for reading! Feel free to reply directly to this email with any questions or thoughts.