Sam Penny (00:00)
All right, ladies and gentlemen, welcome to this session of Built to Buy. Today, we're talking about something that doesn't get enough attention in the world of acquisitions, and it is fit. Because let's be honest, not every business that looks good on paper is going to feel right once you're inside it. This session isn't about valuations, not about financials or due diligence checklists. It's about making sure that the business you buy
is one you actually want to own. One that you can lead, one that aligns with how you work, what you believe and how you want to live. My name is Sam Penny. I've built, bought and sold businesses for over 25 years. And what I've seen over and over again is this. Buyers regret the businesses they don't fit with. Not the ones they paid a little extra for. So today is about helping you avoid the most expensive
expensive mistake in business buying, the wrong business and buying the wrong business for you. let's dig in.
If we haven't met before, I'm Sam Penny, and I've been in the game for over 25 years building, buying and selling businesses across multiple industries. Some I built from the ground up, some I bought, scaled and sold. And I'll tell you what, a few taught me the hard lessons.
Today, I work with business owners and buyers who are ready to make the high stakes moves, but want to do it with clarity, not guesswork. No theory, just what actually works in the real world. I call myself Coach for the Brave because buying a business, especially as an operator, is a brave move. You're not just making an investment, you're stepping into someone else's systems, their team, brand, and values.
And if that fit isn't right, no spreadsheet is going to save you. This session is about equipping you with what most buyers don't figure out until it's too late, because the best buyers aren't just smart, they're aligned. So let's talk about how to become one of them.
Here's what we're going to cover in today's session and also why it matters. First, we'll talk about why not every good business is a good fit. You see, a business might be profitable, growing and professionally presented, but that doesn't mean it's right for you. And a fit is what drives long-term success. Then we'll look at how to spot values and alignment early before your months into a deal.
that's wrong at the core. Next I'll introduce the Buyer Fit framework. So these are four key areas you must evaluate before committing. It's the lens I give to clients who want to make better and safer decisions. We'll also cover some of the red flags that get missed. So signals that the deal might be fine financially, but toxic operationally. And finally,
I'll show you the tools to help you decide with confidence, not just what you can buy, but what you should. This is the session that saves you from buying a job, a mess or a misfit. So let's get started. Right. This isn't just about due diligence. It's not even just about risk. This is about you because when you buy a business, you're not just buying numbers, you're buying a team.
a culture, a rhythm. You're stepping into a leadership role inside someone else's creation. You're inheriting how that founder built things, their systems, their tone, their values, and whether you realize it or not, you're buying a future version for yourself. And if that future doesn't feel right, if you can't see yourself enjoying it, leading it, growing it, then you're going to resent it real fast.
So what this is really about is alignment between how you lead and how the business operates, between what the team expects and how you show up, between where the business is going and where you want to go. So today is making sure that what looks good on paper actually feels right in real life for you. And here's the trap that most buyers fall into.
They evaluate the business like an investor, not like an operator. They look at the numbers, the growth, the customer base, and they say, yeah, this works. But they never stopped to ask, will it work for me? You see, a business can function beautifully on paper. Strong EBITDA, strong profits, low churns, happy customers. But that doesn't mean you'll enjoy leading it. You might hate the culture.
the struggle with the team, you might clash with the way decisions are made. And when that happens, everything gets harder. And I'll tell you what, a lot faster than you expect. So I want to challenge you to think beyond function. And I want you to ask yourself this. Can I lead this team in a way that feels natural to me? Do I believe in this business's philosophy, not just its model?
And am I buying a machine or stepping into a mission I actually care about? Because the deal only works long-term if the fit is real, not just the function.
All right, now we're going to dive into the Buyer Fit framework. This is the framework I give every client before they commit to a deal. It's called the Buyer Fit framework and it's built on four critical layers. Firstly is the value is fit. Does the business reflect what you believe? Is the tone, the mission, the decision-making style, are they all aligned with your worldview? And if not, you'll constantly feel like a stranger in your own company.
Second is leadership fit. So will your leadership style work here? Some businesses are really founder centric. Some are flat. Some are tightly managed. You need to know if your way of leading will land or whether it will clash. And the third part is the skill fit. So what does the business actually need to grow next? Is it sales, strategy, ops, and
Are those your strengths? Or are you buying something that demands skills you don't have or even want to learn? The fourth is the vision fit. So can you see yourself here in two to five years from now? Will it energise you or will it drain you? Most deals that fail post-acquisition don't fall apart on the numbers. They collapse on fit. And this framework
will help you get clear before you sign.
If there's one factor buyers consistently underestimate, it's this one, the values fit. Every business is built on the founder's beliefs. Even if those values aren't written down, they show up in how the team works, how customers are treated, how problems are solved. It's the tone of the internal Slack messages, the vibe in the meetings, the way a refund gets handled.
If your values don't align with that DNA, you'll feel friction every day you own the business. You'll constantly be rewriting rules, pushing uphill, wondering why nothing feels right. That's why values fit is not fluffy. Why it's not rubbish. It's operational. It affects retention, team trust, and how quickly you can step in and lead.
So before you even look at the balance sheet, ask yourself this, what does this business stand for? Do I believe in that? Do I respect the culture or want to change it? Because if you don't align with the values, you'll end up managing conflict instead of growth. Let me show you how this plays out in the real world.
A buyer worked with a few years ago, acquired a business that looked really perfect on paper. It had solid growth, recurring revenue, good margins, attracted a 3.5 time EBITDA. It was a clean deal, but within six months, everything started to unravel. The buyer's leadership style clashed with the team's culture. The founder had built a real family style environment. It had low structure, high trust, lots of autonomy.
But the buyer came in with top-down controls, real aggressive KPIs, and a focus on efficiency. Within 90 days, two key staff left, the morale dropped and clients started to notice, and the growth stalled. So what started as a smart deal became a full-time firefight. The buyer didn't do anything wrong on the surface, but they...
underestimated the culture and overestimated their ability to reshape it. And they ended up selling 18 months later, they were burned out, they were done. And the lesson, a great deal with a bad fit becomes five times the work and 10 times the stress.
So where does fit actually show up during the deal process? It's not always in the data room. It's in the soft stuff, the human stuff. You see it in the team interactions, how they respond to you, whether they open up or hold back. You see it in the conversations with the founder, how they speak about the business, their people and the future. It's in the brand's tone of voice, whether it's formal or casual, bold or reserved, that tone.
is a cultural clue. You'll hear it in the customer reviews. So are they celebrated in the service, the speed, the values? You'll feel it in the business rhythm, whether it's fast paced or methodical, whether it's reactive or strategic, does that match how you lead? You see fit isn't a checkbox, it's a pattern. And the more tuned in you are to those signals, the clearer your decision becomes.
These soft clues often matter more than really the hard metrics because they'll define how the first 12 months feel once you take the reins.
So let's talk about the red flags, not the financial ones, the fit ones. These are the signs that even if the numbers are solid, you're headed for trouble post acquisition. Now let's jump into red flag. Number one, you feel like you need to fix the culture. If your first instinct is to overhaul the team dynamic, you need to ask why culture isn't a toggle switch. If it's wrong for you, it's probably wrong for the deal.
Now, red flag number two, you don't respect how decisions are made. If you find yourself thinking, why would they do it that way? And not in a curious way, pause. That gap can become a source of constant frustration. Red flag number three, you justify the misalignment. Saying things like, ⁓ I can live with that or I'll deal with it later, is often a sign you're already compromising on something that matters.
and then red flag number four.
You don't want to lead the team, just the numbers. If you're not excited to step in and work with the people, you're probably not buying a business. You're actually buying a headache.
So here on the screen, these are the questions that I give every client to sit with seriously before they make an offer. Because even if everything looks great externally, your answers to these will tell you whether you're buying a business that fits you. So you need to ask yourself, could I lead this team today if the founder walked out? Not could I manage, but could I lead in a way that feels natural?
and also in their trust.
The second question, what parts of this business would energize me? Would you look forward to working in the business each day or are you just chasing the returns? What would frustrate me in say three months? And you need to be brutally honest with it because culture, pay systems, this is where the friction would show up. And ask yourself this.
If I had to hold this business for five years, would I still want to? No, I want to flip it. I want to exit it or just own it, operate it, grow it. Does that idea excite you or does it drain you? And if your gut flinches on any of these, you need to pause because long-term regret always starts with the short-term compromise.
So let's make this practical because clarity doesn't come from thinking harder. comes from using the right tools. So here are the four resources that will help you make better buying decisions and faster. All right. The first one is the buy fit checklist. This is a tool to run through the four fit dimensions. The value is...
leadership skill and division, you'll get a clearer picture of whether the business aligns with you and how you lead. The second tool that I have with my clients is the leadership alignment tool. So you use this to compare your leadership style with what the team, the culture and the systems actually expect. It'll show if you're likely to clash or click.
The third tool is the business buying roadmap. So this is a free download that lays out every stage of the acquisition process from identifying the right business to structuring the deal. and the last part, the last tool is simply a one-on-one strategy call with me. So if you're deep in the deal and if you want to experience eyes on the deal before you commit,
This is where we get to do it together. And all of these are designed to take the emotion out of it and bring you greater insight.
All right, so let's bring it all together. So buying a business, it's one of seriously the hardest and biggest decisions you're ever going to make. And the biggest mistake most buyers make is focusing too much on the business and not enough on themselves. And here's what I want you to walk away with today. I want you to know the four levels of Values, leadership, skill and vision.
I want you to look beyond the numbers and look well beyond the spreadsheet because the spreadsheets might tell you if the team will follow you or if you love showing up on Mondays. Now, the third part that I want you to walk away with is how to spot the red flags early. Don't rationalize what feels off. Pay attention to where you hesitate. And the next part,
is trust your instincts and then verify them with evidence. The way you feel matters, but you need facts to back it up. And the last is to make decisions based on your future ownership, not just the past performance. You're not buying history. You're stepping into leadership and you see the right business isn't just profitable.
It's personal. And when the fit's right, the numbers are going to follow.
Now, if this session has hit home, you're currently looking at a deal or even if you're starting your search, this is your chance to get expert eyes on it before you have to make the high stakes move. Because the biggest cost in buying the wrong business isn't the purchase price. it's your time, your energy, your stress.
and the opportunity costs of being tied to something that doesn't fit. You see, I offer a one-on-one strategy session for buyers who want to talk through a deal before they sign. And we walk through the business, the culture, the risk, the red flags and the leadership transition. It's no bullshit that I go through. It's just real world advice from someone who's done this for 25 years. And...
You'll leave the session with clarity, whether this is your deal or if there's warning signs.
If you're even considering a business right now, don't move forward without a gut check. Just simply book a session. It's sampenny.com forward slash strategy. And let's make sure you're buying the right business, not just a convenient one.
Thanks for joining me. I'm Sam Penny. I'll see you in the next session.