What are the biggest lessons you've learned from acquiring a business?

February 26, 2025

by a searcher from University of Texas in Austin, TX, USA

I'm somehow new to the world of business acquisitions and search funds, and I'm eager to learn from those with experience. If you've successfully acquired a business (or explored the process), what were some of the key lessons, mistakes, or insights you wish you knew earlier?

Additionally, I'd love to hear any advice on structuring SBA loans, negotiating with sellers, and sourcing great deals.

Looking forward to learning from you all!

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Reply by a searcher
from University of Pennsylvania in Chicago, IL, USA

There are lots of very common things you'll get from listening to a bunch of Acquiring Minds episodes and chatting with folks, so I'll just share two that I'd love to go back and talk to past me about that are maybe less obvious: 1. better prepare for the tremendous impact a change can have on family/family dynamics. I have a super supportive spouse and two sets of active grandparents, but when I completed my acquisition, we had an 8 month old and 2.5 year old, and even just the change in my schedule and time (a smooth business transition where the business did great in year 1) was super disruptive for everyone and I've had to make various trade-offs between business and family that have been really hard. I wish I'd been much more thoughtful about preparing and managing through that, or at least known it could be coming and consider how to handle it. 2. Assume there's something hiding on the people side of the business (things that have been promised, some hurt feelings, something). I think I was a little naive that what I was being told/seeing was the whole picture because it was a relatively transparent process. Luckily, it's all been good people with almost always good intentions so we're working through the issues but just assume the sellers aren't sharing a lot with you and game plan the very worst outcomes on the people side. and good luck!

Reply by a searcher
from University of Virginia in Los Angeles, CA, USA

Thank you for tagging me. God knows I learned a lot from my first acquisition. I would struggle to put all the lessons in a short post, so I'll mention three that come to my mind first: 1. Don't attempt to bootstrap if your funds are insufficient for the working capital. If the acquisition cost looks like an iceberg, it's actually the cash flows under the water that are the real danger. You can't miss paying salaries or let your shelves empty because of cash gaps. It's no wonder that WC is on top of everyone's mind in this thread. 2. For this reason, whether you trust the seller or not, you gotta get real information about cash flows as early as possible. Prepare that you will likely find out what the seller didn't disclose about WC only after the deal. For this reason, I think it's a must to have the seller stay to train you so that you have them around to handle inevitable surprises. 3. If you plan to run the business with partners, prepare that it will test your relationship. If you are doing it with your spouse, sibling, best friend, etc., watch out for the ways business disagreements can send ripples through your personal relationship. Make sure you allocate time to work on the health of these relationships, your personal well-being, and the well-being of the people you care about. It's just as important as the health of your new business.

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