I’ve seen hundreds of people buy their first business…
And all the ones who succeed avoid these five common mistakes 👇
Skipping proper due diligence
It’s easy to glance at financial statements and think you’re good to go.
But imagine buying a business that looks profitable, then discovering there’s a lease renewal coming at double the current rate.
You’ve got to dig into cash flows, trends, debts, and hidden liabilities.
Don’t get caught off guard!
Ignoring the people
When you buy a business, you’re inheriting a team and their culture.
If you fire or lose a manager who’s kept the business afloat for 10 years, you’ve just lost a huge chunk of your business.
Make sure you have a transition plan, meet the team, and understand who’s essential before you take over.
Falling in love with one deal
Most new buyers get stuck on this.
They find a business they like and become emotionally attached, ignoring red flags or overpaying just to make it work.
If the price is too high or the terms aren’t right, walk away (there are always other deals out there).
Valuing potential over performance
“This business could make $500K if I just implement X, Y, and Z!”
Maybe… But almost every business has “potential” in the right hands.
Focus on existing cash flow from the last 3 years, and make sure you pay for what the business is currently worth, not what it could be.
Buying yourself a job
If the owner works 60+ hours per week and the business has 60-70% profit margins, that’s a warning sign.
Those margins are high because the owner does everything themselves.
Once they leave, you’ll be working those same hours just to keep things running.
Look for businesses with management teams in place, not ones that require you to be the primary operator.
The common thread?
All these mistakes come from the same place: rushing in without thinking through the downside.
Take your time!
A good deal will still be good in two weeks, but a bad deal won’t get better just because you want it to.
And if you’re ready to start evaluating deals…
I share business opportunities with subscribers when I come across ones worth considering.
To get those emails, fill out this short form:
👉 I want to buy or passively invest into a small business
Or, if you’re looking to sell your business, fill out this form instead:
👉 I want to sell my small business (and I’m actively looking for buyers)
Onward,
— Ben Kelly
