Three Lessons You Need to Know Before Buying Your First Business
What I Wish I Knew Before Buying Mine
Some people pay $280,000 for an MBA.
I paid that for a lesson in humility.
In early 2024, I bought a business I’d found on BizBuySell. The listing promised $100,000 a year in cash flow for just 20 hours a week of the owner’s time. At the time, I was a burned-out nurse chasing financial and time freedom. It felt like the perfect escape.
I thought I was buying my freedom.
Instead, I bought a crash course in business acquisition, discernment, and responsibility.
If you’re thinking about buying your first small business, read this before it costs you six figures.
Lesson #1: Numbers Can Lie
During due diligence — the so-called “numbers verification” phase — the seller showed me tax returns that looked nothing like what you’d expect from a business earning $100,000 in profit. His personal and business income were mixed, which he called being “tax smart.”
I looked them over, asked questions, and even had a long conversation about his bookkeeping. He showed me spreadsheets and profit-and-loss statements that conveniently showed exactly what I wanted to see. I trusted him — and his Excel sheets — over the IRS-filed returns.
Take it from me:
Always verify the numbers through an independent CPA.
Ask for bank statements, tax returns (three years minimum), and copies of 1099s/W-2s for every employee.
If anything doesn’t align, walk away. I let my desire to escape nursing push me into buying a business a blind man would’ve avoided.
If the income isn’t on a tax return, it doesn’t exist.
Lesson #2: Employees Are the Real Asset (or Liability)
Half the staff quit the moment the seller announced he was leaving and I was taking over. That told me everything I didn’t know about loyalty. They weren’t staying for the company — they were staying for him. And when the under-the-table payments stopped, so did their commitment.
Don’t buy a people-driven business if you don’t understand the culture.
Ask to speak with key employees before closing.
If the seller refuses, that’s your red flag.
Buy a system, not a personality. If it only works when the founder’s there, it’s not a business — it’s a hostage situation.
Lesson #3: Track Cash Flow in Real Time
By the end of the first month, the business bank account was bleeding. I told myself it was “just growing pains.” It wasn’t. It was a business in its death throes — and I didn’t react fast enough because I wasn’t watching closely enough.
Set up weekly cash-flow tracking the moment you take over.
Don’t wait until month-end to glance at a P&L; by then, it might already be too late.
If you can’t explain why cash went up or down this week, you’re not running the business — it’s running you.
I paid $280,000 for this education.
You can do things better.
If this post saves you even one bad decision — or one dollar — it’s worth every penny I lost.