Avoiding landmines during due diligence

In this episode of the BOB Podcast, Jaryd Krause chats with David C. Barnett—author, educator, and all-around small-business acquisition pro. David’s spent 11 years making straightforward videos about buying, selling, and running small businesses, and he’s seen it all.

They dive into what most first-time buyers totally miss—like how a “simple” service business pulling in $300–400k a year can still hit you with $10k in unexpected repairs, or how a business that seems hands-off can take up way more mental energy than you expect.

You’ll hear things like:

💡 Why lifestyle buyers often crash and how to avoid turning your dream into a money trap
⚠️ Even with a manager, some problems are just going to end up on your desk
🔧 How one dry-cleaning shop kept a family afloat but still drained the owner mentally
😬 What constant staff turnover really means—and the mindset that separates the quitters from the winners
🧠 Why corporate experience doesn’t prepare you for small-business chaos
📈 Why flipping businesses usually fails, but holding one for 5–6 years can pay off big
🤝 Why you need real business friends, not just LinkedIn highlight reels

David shares stories from owners who were totally blindsided by the day-to-day reality—turning neglected businesses into assets, and surviving the crazy, unexpected stuff along the way.

🎧 If you want the raw truth about buying a business—no fluff, just lessons you actually need—this episode’s for you.

Episode Highlights

07:07 – How overpaying and operational surprises can sink a business deal.

11:22 – The danger of buying based on emotion, not strategy.

15:30 – How “time on your side” strengthens your acquisition position.

20:15 – Fixing the “leaky bucket” of household finances before buying.

35:56 – Understanding your emotional drivers: lifestyle vs. self-actualization.

43:34 – Buying dreams vs. buying businesses: the B&B cautionary tale.

47:01 – Why running a business is harder than it looks: expectations vs. reality.

51:15 – The real value of small businesses is in long-term ownership, not flipping.

55:04 – Lessons from real owners: hiring struggles and the mindset of persistence.

Key Takeaways

➥ Know your motivation. Buying a business without understanding your emotional drivers — lifestyle, status, or security — can lead to overpaying or making misaligned choices.

➥ Cashflow and leverage are critical. Overpaying or using high leverage without accounting for operational costs and capital expenditure can sink even profitable businesses.

➥ Time is your ally. Build financial strength and patience first. A strong savings habit and a clear understanding of deals over time make you a stronger, less impulsive buyer.

➥ Due diligence saves you. Verify revenue, costs, and seller claims. Skipping checks or relying on emotion leads to costly mistakes.

➥ Lifestyle vs. business reality. Owning a business provides freedom and income, but it always carries operational burdens. Expect hands-on involvement, even with managers in place.

➥ Start with experience. Before buying a business in a new industry, work in it part-time. Real exposure prevents costly surprises.

➥ Value is in ownership, not flipping. Profit comes from running a business over years, not quick resale. Systems, marketing, and management improve long-term returns.

➥ Network with real business owners. Observing how experienced owners handle hiring, challenges, and growth teaches lessons no podcast or post can convey.

About David Barnett

David C. Barnett is a seasoned business broker, advisor, and educator who has helped aspiring entrepreneurs buy and sell small-to mid-sized businesses since 2009. He is the founder of the Business Buyer Advantage program—a comprehensive training system that guides buyers through finding, analysing, offering on, financing, and integrating a business. David’s background includes business valuation, deal structuring, and a passion for helping people escape the 9-to-5 by owning cash-flowing businesses.

Connect with David Barnett

➥ https://www.businessbuyeradvantage.com

➥ https://www.linkedin.com/in/davidbarnettmoncton 

Resource Links

➥ Connect with Jaryd here - https://www.linkedin.com/in/jarydkrause

➥ Buying Online Businesses Website - https://buyingonlinebusinesses.com

➥ Download the Due Diligence Framework - https://buyingonlinebusinesses.com/freeresources/

➥ Sell your business to us here - https://buyingonlinebusinesses.com/sell-your-business/

➥ Google Ads Service - https://buyingonlinebusinesses.com/ads-services/

Buy & Sell Online Businesses Here (Top Website Brokers We Use) 🔥

➥ Empire Flippers - https://bit.ly/3RtyMkE

➥ Flippa - https://bit.ly/3wGa8r5

➥ Motion Invest - https://bit.ly/3YmJAmO

➥ Investors Club - https://bit.ly/3ZpgioR

*This post may contain affiliate links, so we may earn a small commission when you make a purchase through links on our site/posts at no additional cost to you.

See omnystudio.com/listener for privacy information.