Before You Call the Seller, Ask Yourself This One Question
We talked in a previous post about finding the right size deal — why the "cash flowing a million with no money down" content you see everywhere doesn't hold up, and how to target businesses where you can actually compete and close. That's the structural filter. Today I want to talk about a different kind of filter, one that's more instinctive and honestly just as important.
It's a single question you should ask yourself early in the process, either right when you're reviewing the listing or right after your first call with the seller:
Do I have a gut instinct on how to grow this business?
Not a fully-baked 100-day plan. Not a financial model. Just a gut instinct. Something along the lines of "this business could go after a totally underserved customer segment" or "they're not doing any digital marketing and their competitors are crushing it" or even just "if I hired one more salesperson, the pipeline would be completely different."
If that kind of thought doesn't come naturally, that's information worth paying attention to.
Why This Test Matters Early
Most buyers spend the early stages of evaluation in the wrong direction. They're looking for reasons the business isn't a fraud. Is the revenue real? Are the books clean? Is the seller hiding something?
Those questions matter, but they're not the only ones. And they're the kind of questions you can answer with time and due diligence. The growth question is harder to answer with a spreadsheet.
Here's what the growth gut-check actually tests: Do you understand who this business serves and why those customers pay for it? Do you have any natural affinity for this type of business? And critically, is there something you would do differently?
If you can't form even a rough instinct on any of those things, it often means one of two things. Either the business model is hard for you to get your head around, which doesn't get easier when you own it. Or the business is genuinely stagnant in a way that even you can't see a path through.
Neither is necessarily disqualifying. But both deserve a hard look before you go deeper.
The Stagnant Business Problem
A lot of the businesses that hit the market have been running at the same revenue for three to five years. The seller is tired, checked out, or just ready to move on. That's not a red flag on its own. There's real opportunity in a business that's been coasting because a more engaged owner can often move the needle.
But you have to be honest with yourself about whether you're actually that person for this particular business.
If you're buying a business specifically because revenue has been flat and you plan to change that, you need to walk in with some kind of answer to the question: what will you actually do differently? It doesn't have to be complicated. Maybe the owner stopped following up with leads. Maybe the website hasn't been touched since 2019. Maybe they've never tried to sell to adjacent industries that would obviously buy what they sell.
Those are all legitimate growth paths. But "I'll work harder than the previous owner" is not a plan. Effort isn't a differentiator. Working hard in the wrong direction just means you get there faster.
If you're replacing a seller who's been checked out for two years and you can't articulate what you'd do to change the trajectory, that's worth sitting with before you spend more time and money on the deal.
When You Can't See the Growth Path: Two Options
Sometimes you genuinely can't figure out how to grow a business. Maybe it's in a market you don't understand well. Maybe the growth ceiling feels real. Maybe the customer base is shrinking no matter what anyone does.
That's not automatically a pass. Some businesses are steady and profitable and the goal is to maintain, not expand. But you need to know that going in, and your offer needs to reflect it.
If you can't see a realistic growth story, either pass or make an offer that assumes zero growth. That means pricing it on current cash flow with no premium for upside that you don't actually believe in. Sellers will sometimes push back on this. That's okay. You're not obligated to pay for a growth trajectory that you don't see evidence for and don't have a plan to drive.
Overpaying for a business you expect to grow, then not growing it, is one of the more common ways first-time buyers get into trouble. You end up with a loan sized to a future that didn't materialize.
The Flip Side: A Strong Instinct Is a Green Light to Go Deeper
This isn't just a filter for walking away. It works in the other direction too.
When you review a listing and something clicks immediately, when you read about the customer base and can already see three things you'd do differently, that's a signal. Not a guarantee, but a signal that you have some natural edge with this type of business. That's worth something. It makes the due diligence process sharper because you know what you're looking for. It makes the seller conversations better because you're asking specific questions instead of generic ones.
A buyer who walks into a seller meeting and says "I noticed you've never sold to the municipal government sector, but everything about your service model maps perfectly to that customer" is going to have a very different conversation than someone who shows up with a checklist.
The gut check doesn't replace analysis. But it's a fast way to know whether the analysis is even worth running.
A Simple Sequence to Try
When you're evaluating a listing, before you get deep into financials or request a data room, sit with these three questions:
Who are this business's customers, and why do they buy from this business specifically?
What's one thing I'd change or add in the first six months?
If revenue is flat, what does that tell me, and do I have an answer for it?
If you can answer all three reasonably, keep going. If you're drawing a blank on two or three of them, it's worth asking whether this is the right deal for you or whether you should move on and find something that fits better.
There are a lot of businesses for sale. You don't have to make every one of them work. The courses at Team Rise Consulting can help you think this through.