# Acquisition Evaluator > Business Acquisition Evaluator - Skill: `cdeistopened/acquisition-evaluator` (Agent Skill) - Install (CLI): `npx skillmds@latest add cdeistopened/acquisition-evaluator` - Raw SKILL.md: https://api.skillmd.com/api/skills/cdeistopened/acquisition-evaluator/raw - Safety review: pending - Works with: Claude Code, Claude.ai, OpenAI Codex - Category: Coding & Dev Tools - Author: cdeistopened (https://skillmd.com/u/cdeistopened) - Updated: 2026-09-17 - Page: https://skillmd.com/skills/cdeistopened/acquisition-evaluator --- # Business Acquisition Evaluator Walk a founder through buying a small business using frameworks from Sarah Moore, Brent Beshore, Andrew Wilkinson, and Codie Sanchez as discussed on My First Million. ## When to Use The user wants to buy a business instead of starting one from scratch. They might say: - "I want to buy a small business" - "Help me evaluate this acquisition target" - "How do I find businesses to buy?" - "I have $X to deploy — what should I acquire?" ## Phase 1: Should You Buy Instead of Build? From Shaan Puri and the "boring businesses" thesis across multiple episodes: The MFM case for buying over building: - Existing revenue, customers, and cash flow from day one - Skip the 0-to-1 product-market fit grind - Industry doesn't matter as much as you think — what matters is consistent profitability > "Industry is overrated. What matters is that you find a business that is established and has been consistently profitable for a number of years. Everything else? Garbage." — Sarah Moore Ask the user: 1. How much capital do you have to deploy? (This determines deal size.) 2. Do you want to operate it yourself or hire a CEO? 3. Are you comfortable with debt? (Most small acquisitions use leverage.) 4. What's your time horizon — build and hold, or buy-fix-sell? ## Phase 2: Sourcing — Finding Businesses to Buy From Sarah Moore's zero-money-down acquisition process (`dF6zvTXimxY.md`): **Step 1: Build a target database** - Scrape a private company database (BizBuySell, BizQuest, or direct outreach) - Filter by: geography (1.5-hour radius if you want to visit), revenue range ($1M-$20M sweet spot), years in operation (5+ years of profitability) - Remove: anything over $100M revenue, professional services firms, franchises **Step 2: Mass outreach** - Guess email patterns (first.last@domain, first-initial.last@domain) - Verify with Bulk Email Checker - Template: "I'm looking for a business to buy, and yours seems to perfectly fit the bill — it's within this revenue range, it's been around for a really long time, it's been profitable for a number of years." - Volume matters: Sarah contacted thousands. Expect low single-digit response rates. - Counter-intuitive: angry replies are useful — "they filled out our survey without realizing it" **Step 3: Qualification gate** - On the first call, get to price range quickly - If the seller thinks their business is worth 10x earnings, end the conversation - You're looking for: consistently profitable for multiple years + willing to discuss a seller's note **Source transcript:** `transcripts/dF6zvTXimxY.md` ## Phase 3: Valuation — What to Pay From Sam, Shaan, and guests across multiple episodes: **Small businesses (under $5M revenue):** Trade at 2-4x annual profit (SDE — Seller's Discretionary Earnings) **The quick math:** - Ask for 3 years of tax returns and P&L statements - Calculate average annual profit (add back owner's salary, one-time expenses) - Multiply by 2.5-3.5x for a fair offer - Offer slightly high (closer to 4x) knowing there's room to negotiate down **Red flags in the financials:** - Revenue declining year over year - Single customer concentration (>25% of revenue from one client) - Owner is the entire sales operation (you're buying a job, not a business) - Deferred maintenance or capex (the real cost is hidden) **Sam's North Star math:** Can you express the acquisition as `Purchase Price / Annual Cash Flow = Payback Period`? If payback is under 3 years, it's attractive. Under 2 years, it's a great deal. ## Phase 4: Deal Structure From Sarah Moore and multiple acquisition episodes: **The zero-money-down structure:** - 25% seller's note (the seller finances part of the deal — they get paid over time) - 75% bank financing (SBA loans are designed for this) - Key: find a bank that views the seller's note as equity (not all will) - Expect 20+ bank rejections before finding one that works **Why sellers accept this:** They get a higher total price, ongoing income, and tax advantages from spreading the payment over time. **Alternative structures discussed on MFM:** - Earnouts (avoid if possible — "47% earned less than expected") - Revenue share (better for the buyer, worse for the seller) - Equity rollover (seller keeps a stake — aligns incentives) ## Phase 5: People Diligence From Brent Beshore (`3q1QvEkbbyk.md`): > "The business we're in is predicting people's behavior. If all these businesses are predicated on the people who run them, the primary risks are going to be the people." **The Beshore Method:** 1. **Personality type:** Immediately categorize using Myers-Briggs axes (I/E, S/N, T/F, J/P) to understand how they think and communicate 2. **Motivation pattern:** Layer in Enneagram for emotional drive 3. **The Jerk Test:** Eat with them. Travel with them. Observe them with wait staff, at the airport during a delay. "It is impossible to fake it when you're at the airport grinding through security." 4. **Reference checks:** Talk to employees, suppliers, customers — not just the references the seller provides **Blake's "Teach Me Something" test** (from `3VLDuDZ6Qvo.md`): > Ask the seller or key employees to teach you something about the business. Push back 2-3 times with "I don't understand, can you walk me through that?" — you'll immediately see who knows their stuff and who's bluffing. ## Phase 6: Post-Acquisition — Running What You Bought From Andrew Wilkinson's Tiny Corp approach (`RzwS8iUHeQo.md`): **If you want to operate:** - Ask: "If I could change one thing, what would give the business the most leverage?" Usually it's something boring — pricing, operations, not product. - Don't try to change everything at once. The business worked before you — respect what's there. **If you want to delegate:** - Readiness check: Is the business at $300K+ profit? Does it have product-market fit? - Find the #2 at a similar business that's 2x your size - Comp structure: lead with total comp ($300K = $150K base + $150K bonus), tie bonus to EBITDA, uncapped upside - For equity: require them to write a check (not options) — Wilkinson will even loan them the money - After hiring: send financials monthly. Annual in-person meeting. Leave them alone. **Source transcript:** `transcripts/RzwS8iUHeQo.md` ## Phase 7: Search the Archive Before finalizing any acquisition, search the transcripts for relevant episodes: ``` grep -ri "boring business" transcripts/ # 45 matches across 30 files grep -ri "roll-up" transcripts/ # acquisition roll-up strategies grep -ri "laundromat\|lawn care\|plumbing\|HVAC" transcripts/ # specific boring industries ``` The archive contains detailed case studies of specific acquisitions in dozens of industries. Search for your target industry — there's a good chance Sam, Shaan, or a guest has discussed it. ## Output After walking through all phases, summarize: 1. **Buy vs. Build verdict** for this user's situation 2. **Target profile:** industry, geography, revenue range, deal size 3. **Outreach plan:** how many targets, what template 4. **Valuation range:** based on the financials 5. **Deal structure recommendation** 6. **Key diligence questions** specific to this deal 7. **Post-acquisition plan:** operate or delegate?