Most people who want to buy a business never succeed. And not for the reasons you might think.

It’s not money. It’s not a shortage of good businesses. For some, it might be not putting in the required effort. But even those who are qualified and dedicated to the acquisition journey often fall short.

What stops them is the lack of confidence.

I look at confidence in acquisitions from two perspectives.

The first is deal confidence. Do I have the skills required to navigate the acquisition process and correctly determine if a deal is right for me?

The second is ownership confidence. Do I have the skills required to successfully run, grow, and lead the business I want to buy?

Deal confidence takes time and takes reps. Few people start the acquisition process feeling highly confident in their ability to make good decisions. On average, it takes looking at about a thousand deals to close your first. Part of that reason is there’s a huge learning curve that is built over time by putting in reps, and digging deep into deals. Each deal you look at, you learn from. Your confidence grows. It gets easier. But it’s uncomfortable in the beginning because it requires you to move forward with a high amount of uncertainty.

You’re more ready to own than you think

Ownership confidence is something most qualified buyers should have on day 1, but often don’t have because they aren’t looking at their future business in the right way.

I bought a laundromat without spending a day in the laundry business. My wife didn’t even like me doing laundry at home.

I didn’t really care that what I bought was a laundromat. I ran a marketing agency for over 10 years with the first few focused solely on marketing for local businesses. I wanted to buy a business in an industry where marketing was weak and that didn’t require my full-time effort.

I stumbled upon a laundromat that looked interesting. Solid profits. No advertising. No website. No Google listing.

And the more I explored laundromats, the more I saw that wasn’t an isolated case. It was systemic to the industry. That was the industry-wide signal I was looking for.

I wasn’t confident in my knowledge of laundromats. But I was confident that the marketing gap was real and that I knew how to fix it.

Most people look at a solid business in an unfamiliar industry and immediately dismiss it. That’s usually the wrong move.

Sure, there are some industries where having direct experience is critical. But in most, the experience required to manage the business day-to-day doesn’t have to come from you. It needs to be there, but it can come from others like existing employees or operators you trust.

Instead, I like to think about how a buyer can come into a successful business, fix whatever is broken (and even most successful businesses have something broken), and get an immediate bump in profit and cash flow.

Maybe you have marketing experience. Or maybe it’s sales, customer service, operations, process development, team building, strategy. Whatever superpower you bring into acquisitions, first and foremost find a business to buy where that will lift an already profitable company.

I worked with a buyer named David, thirteen years in corporate sales management. Despite having no manufacturing experience, he bought a manufacturing company. The production side of the business was managed by a long-time employee who wasn’t going anywhere. What the company lacked was a well-run sales team.

The outgoing owner was a good salesperson, but not a great sales leader. He was driving sales because “nobody else could do it.” Fortunately, he had others on the team to handle the ongoing customer relationships. Without that, the owner dependence might have been high enough to make the business unsustainable after he left.

David came in, relied on the key employee to keep production going, and spent the first six months focused on building out a world-class sales team. Profit grew by 18%, well above the 6% average growth over the prior three years.

I see this time and time again. The buyers most ready to be owners are the ones most convinced they aren’t. They convince themselves they can’t take over a specific business because of what they lack, versus tapping into the strengths that made them the successful person they are in the first place.

Where ready buyers freeze

I worked with an engineer a while back. Jennifer. Brilliant, deeply experienced, great with people. She also had a habit of overthinking, and that’s what got her.

She found a deal that fit her buy box perfectly. Around $3 million. Right industry, right size, right location, right financials. She knew it was a good fit, and so did I.

She did everything correctly at the start. Found the listing, called the broker, signed the NDA, got the CIM. We went through it together and it looked good.

Then she slowed way down.

She wanted to know more before she’d submit the LOI. How involved was the owner? Were the key employees going to stay on? A few line items in the financials nagged at her. All fair questions. But every one of them gets answered in due diligence, which happens after the offer, not before it. I told her to put in the LOI based on what she knew. It’s non-binding. It’s how you earn the right to ask those exact questions.

But she wanted answers first.

She was ready to own. That part was never in question. What she didn’t have was confidence in the deal itself, and she was trying to build it from the wrong side of the offer.

You never get all the answers up front

Here’s what Jennifer misunderstood, just like most buyers. The information you need to feel fully confident in a deal isn’t available to you when you’re writing an offer. It comes in later after you’ve earned the right to see it.

Let’s walk through a typical Main Street deal process.

It starts with the listing. Public, anonymous, a few lines of description and a rough financial picture. Enough to decide whether it’s worth a closer look. That’s it.

You sign an NDA and get the CIM. Now you see more. A basic one gives you the business name, the location, real financials with the add-backs laid out. A good one goes further: company history, an org chart, a customer breakdown with any concentration risk, monthly financials going back a few years. But that’s usually all you get before you have to make an offer. Maybe a short call with the owner or broker on top of it. That’s what everyone is working with.

It’s like buying a house. You make an offer, it gets accepted, and you still don’t know everything about the place. That’s what the inspection contingency is for. You assume what you’ve been told is true, you make your offer contingent on verifying it, and if the inspection turns up something, you renegotiate or walk. A business deal works the same way. The LOI is non-binding. It gives you the right to dig in.

Once your offer is accepted, everything is fair game. Bank statements, tax returns, payroll, invoices, sales data, the lease. You might be able to sit down with key employees. You can ask for just about anything the business has. That doesn’t mean you’ll get all of it, and that’s useful too. If a seller won’t hand something over, that tells you something. A delay in diligence is its own kind of answer.

So all those questions Jennifer wanted answered before she’d make an offer, how involved the owner was, whether the employees would stay, the line items that nagged at her, those were diligence questions. The offer is what unlocks the answers. The confidence she was waiting for was sitting on the other side of the move she wouldn’t make - the LOI.

Why qualified buyers don’t close

Jennifer held her ground and asked for a call with the owner before she’d submit. The broker was happy to set it up. But while they worked out the timing, another buyer put in an offer. It got accepted. The deal closed a few months later, with someone else’s name on it.

She was ready to own. She lost the deal anyway. She went looking for certainty too early, and the answers she wanted were sitting in diligence. All she had to do was sign a non-binding LOI.

This is pretty common. Qualified buyers often move too slowly and don’t make enough offers. If you’re slow and you’re not putting in offers, you’re not going to close. Obviously.

I get this can be challenging. Buyers believe they need to feel certain before making an offer. But the acquisition process isn’t designed to do that. Certainty gets built over time during a deal, not all at once up front.

If you’re qualified, get going

For me, a qualified buyer is someone who has the financial capacity to close a deal, a reasonable timeline, and the right experience.

If that’s the case, the next steps are simple. Get into a deal.

Be confident that the experience you bring - your superpower, what made you the success you are - will allow you to achieve that same level of success as an owner.

Don’t be held back by not being confident in a deal up front. If you even remotely think a deal could be a good fit, move forward. Each step allows you to be more confident it’s the right deal, or the wrong deal.

Best case scenario, you find the perfect business. Worst case, you gain valuable lessons that will help you going forward and spend a little time doing so.

Don’t remain on the sidelines waiting for a high degree of confidence that will never come without taking action.

Review deals. Make offers. Get under contract. Believe in yourself and you’ll get across the finish line.

If this was helpful, pass it along to someone looking to buy a business.

I write On Owning for people buying, selling, and growing businesses. Subscribe if that’s you.

And if you’d rather not go it alone, that’s what I do. I work with a small number of buyers through their deals, helping them figure out what’s worth pursuing and what isn’t, while they stay in control. Working on a deal now? Reply and tell me about it.

TL;DR

• Two levers move the price on an acquisition: cash flow and the multiple sitting on top of it.

• Most owners work cash flow their whole careers. The multiple is the bigger lever, and it doesn’t move on its own.

• Nine company-specific factors decide where it lands. The 9 Multiple Movers.

• For owners, this decides whether years of building pay off. For buyers, it decides whether the business holds up for years to come.

The janitorial company had $650,000 in seller’s discretionary earnings. The asking price was $2.8 million, right near the top of the industry range. After some back and forth, they agreed to $2.6 million all cash on close.

We spent two weeks in due diligence before flagging a few things.

Three customers made up 39% of the company’s revenue. That’s a bit scary.

Roughly 40% of monthly revenue was out of contract running month-to-month. Well below industry norms.

Documented processes were minimal. The owner ran daily operations from memory. Nothing critical was written down anywhere.

Those three things have names. Concentration Risk. Revenue Predictability. Transferable Operations. And there are 9 of them in total.

I call them “Multiple Movers.”

Together, they determine where a business actually lands inside its industry multiple range. And they are a proxy for the risk associated with any acquisition.

In this deal, the buyer had a choice: renegotiate the price and/or restructure the terms. They chose terms.

$700,000 moved from SBA financing to a forgivable seller note, structured around 12-month customer retention tranches. If 90% or more of the revenue stayed on the books for a year, the seller collected the full note. Below 75% retention, the note was fully forgiven. In between those thresholds, the note was partially written off.

The transition period was extended from 30 days of mostly part-time to a 90-day full-time commitment and extended availability throughout the first year. During that time, the outgoing owner needed to transition key relationships and help document key processes.

The buyer built a structure where the three things they were worried about had real financial consequences for the person best positioned to manage them through the transition: the outgoing owner.

Both sides got what they needed. The buyer felt comfortable with the risk identified during due diligence. And the seller wound up getting every dollar of the headline price.

Most owners know where the cash flow lever is. They can see it on the P&L. Grow revenue, cut costs, watch the number move. The math is straightforward.

The multiple is a different kind of lever. It sits on top of the earnings base, and it is the bigger lever on final price. On a business generating $1M in cash flow, the difference between a 3x and a 5x multiple is $2M.

That gap does not come from the industry range. It comes from 9 company-specific factors.

Here they are:

Cash Flow Quality. Owners value the business off what shows up on the P&L. Buyers value it off what survives diligence. Cash flow quality drives everything else. A weak score on this Mover discounts every other Mover with it.

Revenue Predictability. Recurring revenue and multi-year contracts reduce perceived risk of future shortfalls. Month-to-month or project-based revenue is common. Guaranteed revenue is worth more, and buyers will pay more for it.

Concentration Risk. When a significant share of revenue depends on a small number of customers, suppliers, or employees, buyers associate that with additional risk. The response shows up sometimes in the multiple, often in deal structure.

Owner Independence. Buyers can tell the difference between an operating company and an owner’s job. When the business runs on the owner’s daily presence, the buyer has to replace the owner before collecting cash flow.

Transferable Operations. Documented processes and institutional knowledge that live in the company rather than in the owner’s head reduce transition risk for the buyer.

Growth Engine. A repeatable mechanism for generating new customers is valued differently than growth that depends on the owner calling the right people, or single channel marketing.

Competitive Position. The bar is lower here than most owners expect. Most sub-$10M businesses do not have a defensible moat. Proprietary product, exclusive territory, or long-term sticky customers are legitimate positions. Generic service businesses without switching costs sit at the lower end.

Cash Conversion. High inventory requirements, long receivables cycles, or capital-intensive operations eat into reported cash flow. The question is how much of the earnings number a buyer can actually collect.

Financing Fit. Whether the deal can be funded at the seller’s price. Bank underwriting, debt cash flow coverage, seller financing capacity, and alternative funding sources all shape the universe of buyers who can actually close.

No single Mover decides where a business lands. The 9 work together, and they compound. A business with three strong Movers and six weak ones does not average out to the middle of the range. The weak ones pull harder than the strong ones push.

It works the same in every deal.

Strong Movers lower risk. Weak Movers increase it.

These impact the multiple, the deal structure, or both. Here are two deals that show this clearly from opposite directions.

Seven months of focused work

A landscaping company with $1.2M in EBITDA. The industry multiple at this cash flow level ranges from about a 3.5-5.5x. At the low end of that range, the owner walks away with $4.2M. At the high end, $6.6M. The difference between those numbers is why the Multiple Movers matter.

When the owner approached me, he had two big issues. Owner Independence was the bigger one. The owner ran day-to-day operations and personally managed the company’s most important client relationships.

This business ran on the owner’s back. He was in every client relationship and every operational decision. From a buyer’s perspective, that was a job, not a business.

Revenue Predictability was the other weak Mover. Most of the major account revenue was month-to-month. No contracts locking in the work going forward.

Seven months of focused work and we were finally ready to go to market. The owner hired a VP of Operations and stepped back from running day-to-day. A senior salesperson took over the major account relationships. The larger commercial accounts moved to multi-year contracts.

No new business lines. No huge marketing campaigns. No dramatic operational overhaul. The work was focused on fixing Owner Independence and Revenue Predictability, moving them from weak to something a buyer could look at favorably.

The outcome: he sold at 4.9x. Much more than he would have received had he not spent a relatively short amount of time fixing these issues.

Your Price, My Terms

The janitorial deal from earlier went the other direction. Due diligence flagged three weak Movers: Concentration Risk, Revenue Predictability, and Transferable Operations.

The buyer didn’t try and re-negotiate the price. That’s always a delicate subject. Instead, he proposed terms that would mitigate the risks while offering the seller an opportunity to prove the business was worth what he thought it was.

The Myth of the Multiple

People often get a specific multiple number stuck in their head. And that often comes from an industry average they’ve read about or stories about other deals that closed.

But that’s not the best way of thinking about it.

Instead, think of it as a range that a business will likely sell for. Where a business lands inside that range is decided by the nine Multiple Movers.

Strong Movers push toward the top. Weak Movers pull toward the bottom, or move the risk into the deal structure when buyers decide the price isn’t worth fighting.

For the owner, weak Movers are a direct cost. For the buyer, weak Movers are a red flag. The same diagnostic reads differently from each side of the table, but the underlying mechanism doesn’t change.

The question, for both sides, is which Movers are actually weak and what it would take to move them.

For the owner, the starting question is which Movers are actually weak and which ones can be moved in the time available. Four of the nine come up most often in that conversation. The other five still matter, but they don’t usually move much within a planning horizon.

Cash Flow Quality sits at the foundation. When it’s weak, the doubt it creates tends to follow every other Mover. Strong Revenue Predictability matters less if the buyer isn’t sure what earnings base to apply it to. Transferable Operations look better on paper than they perform in diligence. The buyer prices the uncertainty, not the stated upside. Fix Cash Flow Quality first, or work on the others with that ceiling already in mind.

Transferable Operations is usually the most fixable on a reasonable timeline. Documented processes, defined roles, systems that don’t live in someone’s head: this is work that can actually be done in a few months. It doesn’t require landing new customers or restructuring the org chart. It requires execution.

Concentration Risk takes longer. Diversifying a customer base, building redundancy in key supplier relationships, reducing the dependence on any single employee. That’s going to take some time. An owner who wants to go to market within the next six to twelve months can make some improvements but they need to be realistic about the potential impact.

Owner Independence tends to be the highest-leverage work when there’s real runway before the sale. Hiring into the business, transitioning relationships, proving the team can run things. Buyers test this against observed behavior, not stated intent. That takes time. An owner who starts early on this can make a significant impact on the multiple and the amount of cash they put in their pocket.

For the buyer, the diagnostic flips. The question isn’t which Movers are fixable. It’s whether the price on the table reflects the Movers that are actually weak, and whether they can accept the risk that comes with them.

When a deal is priced at the top of the multiple range and comes with a host of weak Movers, it’s overpriced. But when a buyer finds a strong business with strong Movers, even a mid-range price might be an amazing deal.

Four of the nine Multiple Movers tend to come up most often in due diligence. The other five aren’t ignored, they just show up less often.

Cash Flow Quality is where every buyer’s diligence starts. If add-backs don’t hold up, if margins are unstable, or if revenue recognition is messy, the buyer has to make a choice. Apply a lower multiple to a lower cash flow number, offer risk mitigating terms, or walk away. Cash Flow Quality is what decides whether the rest of the due diligence is even worth doing.

Concentration Risk is the Mover most likely to hide in a strong recent year. A business with 35% of revenue from one customer can post twelve good months and still carry serious risk into the next year. The buyer’s job is to look forward and ask what happens if that customer leaves. The answer ends up in the price or the structure.

Financing Fit is mostly buyer-side execution. The seller knows the price they want; the buyer has to figure out how to get there with bank underwriting, seller financing, and the equity infusion available. Weak Financing Fit forces creative structure to bridge the gap when the lender’s number and the seller’s number don’t agree.

Cash Conversion is where reported earnings stop being theoretical. Working capital, receivables cycles, and capital expenditures all consume cash before it shows up in the bank account. A business that shows strong EBITDA but burns cash to grow is a different deal than one that converts earnings cleanly. Debt service has to come from somewhere.

The harder case is when the discount isn’t in the price at all. A deal can be priced at a reasonable multiple and still carry significant risk if the Movers aren’t examined.

That risk doesn’t disappear because the price looked fair. It comes with the deal. The Movers are what separate a fair price on a strong business from a fair price on a fragile one, and a sharp buyer treats that distinction as the whole point.

Buying a business is one of the biggest moves a person makes with their capital. Done well, it can change a life. The Multiple Movers are how a sharp buyer separates the deals worth that move from the ones that aren’t.

When both sides are working from the same framework, the surprises mostly go away. The owner knows what the buyer is looking for. The buyer knows what the owner has strengthened.

The owner gets paid for the work they did. The buyer acquires a business they can build on. Both sides win when both sides see the same picture.

Two levers move the price on an acquisition.

The first is cash flow. Grow the earnings base and the price goes up. It shows up on the P&L every month. Visible, trackable, and something most owners work on for their entire careers.

The second lever is the multiple that sits on top of that earnings base and how the business measures up against its peers in terms of risk. In an industry priced between 3.5x and 6x, the gap between those two endpoints is massive. On a $1.2M EBITDA business, it is more than $3 million.

Both levers are real. The cash flow lever is the one most owners ponder day and night. The multiple lever is the one most owners don’t even think about.

The 9 Multiple Movers are the key.

Cash Flow Quality, Revenue Predictability, Concentration Risk, Owner Independence, Transferable Operations, Growth Engine, Competitive Position, Cash Conversion, Financing Fit.

Each one either lowers perceived risk or raises it. Strong Movers push a business toward higher multiples, higher offers, and seller-favorable terms. Weak ones push it to lower multiples, lower offers, and buyer-favorable terms.

If you’re an owner, this is what decides whether the next chapter of your life looks like the one you spent years imagining.

If you’re a buyer, this is how you commit to your next chapter knowing the business will actually hold up for years to come.

If this landed, share it with someone facing a decision like this on either side of the table.

If you’re working through it yourself, I read every reply.

Six reasons qualified buyers haven’t closed a deal. None of them are deal quality.

If you’ve spent at least a few months searching for an acquisition, you’ve probably told yourself the right deal hasn’t surfaced. You’re learning. You’re running the numbers. You review listings, sign NDAs, talk to brokers. You tell yourself you’ll know the right one when you see it, but so far every deal has had an issue.

That self-description is hard to argue with from the inside. It defends the months you’ve spent searching and lets you keep the dream alive. The work feels real because it is real. Listings get read. Spreadsheets get built. Questions get asked.

But the buyers I’ve watched close deals realized they needed to do a lot more.

They protected hours just like they were training for a marathon. They submitted offers even if they didn’t feel ready. They broke down the acquisition process into stages instead of trying to swallow it whole.

They engaged seriously with listed deals so brokers took them seriously and brought them deals later. They hired pros rather than trying to become every expert themselves. They negotiated terms when price felt stuck instead of walking.

I’ve worked on over 200 transactions on both sides of the table, and I’ve watched qualified buyers stall in the same six places.

The work you really need to do is figuring out your stall and breaking it.

Why hobby hours don’t close deals

It takes 600 to 1,000 hours of focused work to close one deal. Some people are faster, some are slower, but the range is real.

Run the math. If you want to close in twelve months, that’s 11 to 19 hours a week, every week. Below that floor, the math doesn’t work.

Buyers who treat acquisition like a hobby, fitting it around their job and life when there’s time, never get the reps in. They look at a listing here and there. They sign an NDA every now and then. They run a quick screen on a deal and move on. The hours never compound. Neither does the pattern recognition that comes from doing the work in volume.

Buyers who close deals treat it as a part-time job. For some, full-time. They build routines around it, schedule the time, and follow the schedule. Not hobby hours. Marathon training.

If acquisition is bumping up against everything else in your calendar and losing, you have a calendar problem. Block the hours. Defend them.

Confidence is built inside deals

One buyer had everything lined up. Corporate finance background, $300K saved, 8 months of active research. She could walk you through EBITDA math without pausing. She found 3 businesses that looked perfect.

The first had an owner who wanted to stay on for 18 months post-close. The second had a lease renewal coming up in 8 months. The third had a key employee she wasn’t sure about.

Each time, she stepped back. Kept searching.

Six months later, she was still searching.

None of those issues were fatal. All three were manageable, the kind of thing you negotiate through in due diligence or structure around in the LOI. But she didn’t know that yet, because she’d never been inside a deal. The confidence you need to evaluate those issues clearly only comes from real deal experience.

Another buyer submitted an LOI 5 months into his search. He told me he was maybe 60% sure. We talked through what he didn’t know and which stages of due diligence would answer those questions. He submitted anyway.

He didn’t close that one. Due diligence surfaced customer concentration he couldn’t get comfortable with. But three months later he was in a second deal, asking sharper questions, moving faster, knowing what he needed to see. He closed 4 months after that.

Confidence is built inside deals, not before them.

Overwhelm is a feeling, not a fact

The pattern is easy to recognize.

“I don’t know where to start.”

“There’s so much to learn.”

“I can’t tell a good deal from a bad one.”

“I don’t want to overpay.”

When you’re screening listings, you don’t need to get hung up on how to structure the deal or line up financing. You’re answering one question. Does this business pass your buy-box?

When you’re structuring the deal, you don’t need to obsess over every detail of due diligence. You’re working out terms that make sense for both sides.

Buyers who get paralyzed about every step of the acquisition process never get a deal done. Every question surfaces another question. Good deals pass by while they’re still deciding if they’re ready to engage with one.

Buyers who close solve the problem in front of them. They are confident in their ability to solve future problems once they get there.

Overwhelm is a feeling. The work is simpler than it looks. One problem at a time, in order.

The deals are there

Most acquisitions close through brokers. Axial’s 2025 survey of independent sponsor buyers found 93.8% sourced their deals through sell-side intermediaries. BizBuySell tracked 9,586 small businesses closed on its platform alone in 2025. There’s no shortage of listed deals.

But pocket deals, those represented by a broker but not listed publicly, are real at the higher end of the lower middle market. Above roughly $5 million in enterprise value, a meaningful share of transactions never hit a listing platform. A broker quietly shows a deal to two or three buyers they already know and trust.

Two things put a buyer on that short list. The first is financial qualification. Can you actually close at the price the broker is going to ask? The second is whether you can close on a timely basis. Brokers gauge that by watching how you work. They notice when you return calls within hours, sign NDAs and actually review the CIM, ask sharp questions, submit offers that aren’t shots in the dark, and walk through diligence cleanly even when the deal doesn’t close.

That short-list position is built on the listed deals you engage with, long before you close one. The work you do on listings is what makes you the buyer a broker thinks of when a pocket deal needs a quick, qualified take.

The deals are there. They come through brokers, and they reach buyers brokers trust to close.

The problem was never deal availability.

Who, not how

One buyer I worked with was a corporate finance VP in his mid-40s, highly qualified. He spent eight months learning everything he could about acquisitions and took some action as well. Reviewed a handful of listings, signed a few NDAs. He could discuss deal points with surprising fluency for someone who’d never done a deal.

He still hadn’t submitted an offer. Every time he got close to a listing he liked, a new question he just “had to answer” would stop him.

“I need to better understand reps and warranties before I make an offer.”

“I need to dig into tax structuring.”

The learning felt like doing work. From the outside, it really wasn’t.

Another buyer with a similar background spent their first eight months not only learning about M&A but taking REAL action. As soon as he found a deal he really liked, he brought in the people he needed to get an offer on the table. He hired a CPA experienced with acquisitions and a seasoned M&A attorney. And I introduced him to an SBA banker who I worked with previously on a similar deal.

He closed in nine months. His CPA caught two add-back issues during due diligence that would have cost him $80,000. His attorney negotiated indemnification caps the seller’s counsel was going to push past. His banker structured the SBA loan to leave working capital for the first 90 days.

You will never analyze financials like a CFO who’s done it for twenty years. You will never structure a deal like an M&A advisor who’s done hundreds. You will never draft a purchase agreement like an attorney who’s drafted a thousand. You don’t have to.

Your job is to run and close the deal. Find the pros who can take care of the things you’re not an expert in.

Who, not how.

Walking over price kills good deals

A buyer I worked with was looking at a business doing $800,000 in EBITDA. The seller wanted 5.2x. The buyer thought it should be 4.5x. He’d run the math against industry averages and decided the asking price was too rich.

The business had what every buyer claims they want. Recurring revenue. Loyal, long-tenured employees. A management layer below the owner. Good customer concentration. EBITDA up every year for the last six. The owner was retiring on a clear timeline and willing to stay 6 to 12 months for handoff.

He almost walked at 5.2x. We negotiated terms. He came up to 4.9x. In exchange, he got a meaningful seller note at favorable rates and a working-capital target that protected him through the transition. The seller felt respected and accepted. The buyer paid a higher multiple than he’d originally targeted, but his cash-at-close didn’t change much.

That was three years ago. EBITDA is up 35%. He’s paid down most of the seller note. He has the freedom he bought the business to get.

He almost walked over a $560,000 difference on purchase price. Three years later, the equity he’s built dwarfs that number.

Better businesses deserve higher multiples. The multiple is a proxy for risk. A lower-risk business earns a higher number. When price feels stuck, negotiate the structure. Walking over price kills more good deals than it saves you from bad ones.

The work you’ve been missing

The work you’ve been doing is real. The hours of learning. The listings reviewed. The questions you’ve taken to your CPA. The conversations with friends who’ve bought. None of that was wasted.

It was just incomplete.

Closed deals come from different work. The offers you didn’t submit. The brokers who didn’t yet think of you for a pocket deal. The terms you didn’t negotiate when price felt stuck. That’s the work.

Six patterns. One of them is yours. Maybe two.

Read back through. Mark the one that hit. Then break it.

That’s the work you’ve been missing.

If you’ve been searching for months without closing, reply and tell me which pattern you recognized. I read every reply.

If a friend is searching, share this with them. It’s the playbook I wish every buyer had in their first month.

Subscribe for next week’s piece on the seventh problem this one doesn’t address. What happens to your confidence the week after you close.

Most people who buy or sell a business never get what they came for. Not because they got the wrong number. Because they focused on the wrong things.

The success of a deal rarely depends on price. It depends on the earnings base, the structure, the risk allocation, and whether the business is actually transferable after the owner leaves. Plus the personal paradigm the deal is engineered to challenge.

On Owning covers all of it. Both sides of the table. Plain language. Weekly.

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TL;DR

• Valuation usually starts with what earnings survive diligence. The multiple matters, but not as much. The earnings underneath it is where most of the money is decided.

• The purchase price is just the headline. The real outcome is buried in the details such as notes, earnouts, escrow and holdbacks, tax allocation, working capital peg, and indemnity terms.

• Multiples don’t rise because sellers think the business is special. They rise when buyers think the risk is low. Sellers can move that, with planning.

• A good business is not the same as a good deal. A good offer is not the highest offer. Both sides are picking the right deal for them specifically.

• Whether an acquisition delivers life-changing freedom or lifetime regret has little to do with the deal itself, and everything to do with the beliefs, values, lived experience, and daily life the deal is engineered to challenge.

Where valuation actually starts

Most people think valuation starts with the multiple. It usually starts with what earnings survive diligence.

Owners and buyers spend a lot of time on what number to multiply earnings by. Three times. Three and a half times. Five times. That conversation matters. But there’s a more important one happening underneath it. What earnings amount gets multiplied at all.

A 4x multiple on shaky earnings is worse than a 3x multiple on clean earnings. The smaller multiple wins because the earnings number underneath it is something a buyer can actually rely on.

Most owners assume the add-backs they list survive the process. On average, over 20% of EBITDA shows up as claimed add-backs across LOIs. I’ve seen cases where add-backs make up over 50% of “earnings”. Clean documentation and not abusing the tax code is what moves a buyer from repricing every add-back to accepting most of them.

Owner compensation is one of the biggest swings. If the owner is paying themselves $80K to run a business that needs a $200K manager once they’re gone, that’s driving the earnings number down. The opposite is true as well. Our goal is to reach a normalization of what it takes to run the business.

The shift between SDE (what an owner-operator earns) and EBITDA (what an institutional buyer would underwrite once they hire a manager) often catches owners off guard. Same business. Same revenue. Different earnings number depending on who’s pricing it.

Don’t ask what the multiple is until you know what earnings base survives diligence. That’s where most of the money is decided.

What’s hidden in the structure

The purchase price is just the headline. The real deal is what’s buried in the details such as notes, earnouts, escrow and holdbacks, tax allocation, working capital pegs, and indemnity terms.

A $5M deal in all cash is not the same as a $5M deal with a 30% earnout, a 15% seller note, an escrow holdback, and a working capital adjustment. Same headline number. Three or four different outcomes that will show up about 12 months later.

Earnouts are usually pitched as bridge-the-gap dollars, money the seller will probably get. The data tells a different story. Across private-company deals, only 59% of earnouts pay anything at all and only 21 cents of every promised dollar reaches the seller. There’s a lot the seller can do to change that payout rate with the right structure and the right advice.

Working capital adjustments are the next quiet mover. They show up in more than 90% of acquisitions. The peg gets set during negotiation. The closing balance sheet gets measured against it. A small mismatch between how the peg was built and how the close gets calculated can move serious dollars after the LOI is already signed.

Tax allocation is another one most people miss. In an asset deal, the buyer and seller have to decide how the purchase price gets allocated across goodwill, equipment, non-compete, inventory, and other classes. The allocation moves the after-tax proceeds for the seller and the depreciation schedule for the buyer. A higher headline price with a worse allocation can leave the seller with less than a lower headline price with a cleaner one.

Price is one negotiation. The structure is where the real outcome gets decided.

What actually moves the multiple

The multiple isn’t just some industry average. That might be a place to start, but in all but the most “average” deals the swings could be significant.

The multiple is a risk number. Higher multiple, lower perceived risk. Lower multiple, higher perceived risk. Industry averages hide this because every company in an industry carries different risk profiles.

A boring business with sticky customers and a real second layer of management will almost always sell for a higher multiple than an exciting business with a few key relationships and one indispensable owner.

Several levers move the multiple down: owner dependence, customer concentration, weak management depth, heavy capex needs, thin or volatile margins. Several move it up: recurring revenue, strong cash conversion, a real second layer of management, sticky customer relationships, documented processes, low concentration. Each one can be improved. Most of them respond to 12 to 18 months of focused work if the owner starts before the deal is on the table.

Owner dependence is the biggest one. If the business runs on the owner’s relationships, the owner’s instincts, and the owner’s daily presence, the buyer is buying a job with employees attached. A buyer who has to replace the owner before they can collect the cash flow is going to pay less or pass altogether. Building a second layer of management, documenting decisions, and stepping back operationally before the sale moves the multiple in a way that nothing else does.

Customer concentration is the second biggest. One customer at 25% of revenue looks like a strong relationship to the seller and a real risk to the buyer. The same earnings number with diversified customers is worth more than the same number with concentrated ones.

I’ve seen businesses with similar EBITDA and in similar industries vary between a 2x and 6x multiple because of this.

But the multiple is more in the owner’s control than most realize. It just takes time and intent.

What makes a deal good

A good business is not the same thing as a good deal. A good deal is a business the buyer can finance, operate, transfer, and improve without depending on the seller forever. And one where both parties can realize their desired life post-acquisition.

For buyers, this is the part that gets confused most often. A strong company can still be a bad deal. The price might be wrong. The debt service might consume every dollar of free cash flow. The owner might be the operation, which means the cash flow disappears the day the owner walks out the door.

Or the business might be a perfectly good business and the wrong fit for this specific buyer’s life. Capital gets you to the table. Fit, energy, industry knowledge, and the life the buyer wants on the other side decide whether they should sit down.

A good offer is not necessarily the highest offer. It is the best mix of cash, certainty, tax outcome, buyer fit, and post-close risk.

For sellers, this is harder than it sounds.

The highest offer amount is easy to anchor on. It’s also the easiest to get wrong.

A high offer from a buyer with shaky financing has a real chance of falling out of contract or retrading hard during diligence. A high offer paired with a punishing tax allocation can deliver less to the seller than a smaller offer with a tax structure more favorable to the seller. A high offer from a buyer with no transition plan can put the employees, the customers, and the seller’s earnout at risk all at once.

For sellers, it’s net proceeds that matters. But that’s rarely what people talk about.

Both sides of the table need to figure out what the right deal is for them. And when that happens on the same deal, it closes fast and nobody looks back with regret.

What the deal asks of you

Whether an acquisition delivers life-changing freedom or lifetime regret has little to do with the deal itself, and everything to do with the beliefs, values, lived experience, and daily life the deal is engineered to challenge.

The deal closes on the same day for both sides. So does a chapter in each of their lives.

The seller wakes up Monday, gets dressed for work, and realizes that part of their life is over. They have no place to go. The relationships they spent years building have changed overnight.

For the buyer, running the business gets harder and harder - mentally, emotionally, physically, financially. They start questioning whether leaving their W2 was the right call.

Both start asking themselves tough questions. Regret starts to sink in. The shame is that those questions could have been addressed early on. But they don’t know to ask, and nobody else is raising them.

I call this “The Closing Paradigm”.

This is the part the M&A industry skips. On Owning doesn’t.

Why this is here

Over the past five years, I’ve been fortunate to bring my insights to tens of thousands of buyers and owners through workshops, courses, conferences, and lots and lots of Zoom calls.

I’ve had hundreds of in-depth conversations with everyone involved in acquisitions - buyers, sellers, advisors, attorneys, lenders, family members - you name it. People working through what they were facing, thinking out loud about deals that hadn’t happened yet, deals that were stuck, deals that closed, and the parts of life that came after.

I started advising in acquisitions over two decades ago as a CFA charterholder working with highly successful owners. Since then I’ve participated in my own deals as both a buyer and seller. I’ve worked on over two hundred deals in one capacity or another. And I’ve been able to advise and coach thousands which has really let me get inside the minds of deal makers.

I’ve been able to get an inside look at what makes a great deal. And I’ve been able to see the life-changing impact a great deal can have.

On Owning is where I’ll share that knowledge and the insights I’ve learned along the way. For both buyers and owners - those making a move today and those planning a move down the road. Plain language, weekly.

One question to start

If you’re buying or selling a business, or thinking about either someday, I want to hear from you. What’s your single biggest M&A challenge right now?

Reply to any post and tell me. I read every one. The answers shape what I write next.

If you’re not in the deal world yet but you can feel it pulling at you, that counts too. Tell me what you’re trying to figure out.

Over the coming weeks, I’ll go deeper on all of this and more.

The work starts now. So does this publication.