When people hear that I buy businesses, the first thing they usually ask about is the deals I’ve closed. What they don’t always realize is that for every company I’ve acquired, there are dozens I walked away from. In fact, some of the most valuable lessons I’ve learned in acquisitions have come from the deals I didn’t do.
Turning down a business can be painful in the moment. Sometimes you’ve spent months reviewing documents, meeting with the seller, and imagining what you could build. Walking away feels like failure. But I’ve come to see those decisions as wins because each one saved me from bigger problems down the road.
In this article, I’ll share the most important lessons I’ve learned from businesses I chose not to buy, and how those experiences sharpened my judgment as a buyer.
The Illusion of Strong Financials
One of the first businesses I reviewed had immaculate financial statements. The P&Ls looked polished, the margins were healthy, and the growth trend was consistent. On the surface, it seemed like a slam dunk.
But when I dug deeper, I realized the financials had been massaged to look better than reality. The seller had excluded certain expenses, categorized personal costs as business write-offs, and overestimated the reliability of accounts receivable.
That deal taught me never to take financials at face value. Every number has to be tested against reality. Financial statements can be an illusion, and diligence is the only way to pierce through.
The Owner-Dependency Trap
Another business I walked away from revolved entirely around the owner. They were the rainmaker, the operations manager, the salesperson, and the cultural glue. Without them, the business would collapse.
Initially, I thought I could step in and fill their role. But the more I observed, the more I realized it wasn’t sustainable. The employees were conditioned to rely on the owner for every decision. Customers did business with the owner, not the company.
That experience showed me the danger of owner dependency. A valuable business is one that runs on systems, not personalities. If I see that the company can’t function without the seller, I now know to step back.
The Hidden Customer Concentration
One of the hardest deals I ever walked away from involved a company with strong cash flow, but nearly 70 percent of revenue came from one customer.
At first, the seller dismissed it as no big deal. “We’ve worked with them for years,” they said. But when I asked for the contract terms, I found that the agreement was up for renewal within twelve months, with no guarantee of extension.
That was a risk I wasn’t willing to take. Losing one customer shouldn’t cripple a business, and in this case, it would have. I walked away, and I’ve carried that lesson into every deal since: customer concentration is a silent killer.
The Culture That Didn’t Fit
Not every lesson is about numbers. Some are about people. I once considered acquiring a business with excellent revenue and stable operations, but when I spent time with the employees, I felt the culture was toxic. Communication was poor, turnover was high, and morale was low.
The seller insisted it wasn’t a problem, but I knew culture is harder to fix than processes. I passed on the deal. That choice saved me from inheriting dysfunction that would have taken years to repair.
Today, I place as much weight on culture as I do on financials. If the people aren’t aligned, growth is nearly impossible.
The Seller Who Wouldn’t Be Honest
Trust is non-negotiable in acquisitions. In one deal, I noticed the seller dodging certain questions. They provided partial answers, delayed sharing documents, and shifted their story depending on the conversation.
Even if the numbers looked fine, I couldn’t ignore the lack of transparency. I decided not to move forward. Later, I learned that the company was facing a legal dispute that the seller had failed to disclose. That confirmed I had made the right call.
Now, if I sense dishonesty, I don’t rationalize it away. I walk. Trust issues at the table usually signal bigger issues hidden underneath.
The Market That Was Shrinking
Another lesson came from a business in an industry that was declining. The financials were solid, and the team was strong, but the overall market was shrinking year by year.
I had to ask myself: could I fight gravity? Could I pour energy into a business where demand was steadily evaporating? The answer was no. I walked away, even though it was tempting to believe I could outsmart market forces.
That experience reinforced the importance of industry dynamics. Even a good company in a bad market is risky. I prefer good companies in stable or growing industries.
The Deal That Required Too Much Leverage
One opportunity looked great operationally and financially, but the seller demanded an all-cash deal with little room for financing creativity. To make it work, I would have had to take on heavy debt that left no margin for error.
I knew that if revenue dipped even slightly, I’d be at risk of default. It wasn’t worth it. I walked away. That decision saved me from a deal that could have crushed me financially.
Since then, I’ve made it a rule: never rely on perfect conditions to make a deal work. If the business can’t survive stress scenarios, the structure is too fragile.
The Power of Walking Away
Each of these experiences has taught me the same overarching lesson: the power of walking away. When I was new to acquisitions, I feared that saying no meant missing my only shot. But the truth is, deals are like buses, there’s always another one coming.
Walking away isn’t failure. It’s discipline. It’s choosing long-term stability over short-term excitement.
How I Apply These Lessons Today
Now, when I evaluate a business, I use the lessons from past “no’s” as a filter. I ask myself:
- Are the financials real or polished?
- Can the business run without the owner?
- Is revenue diversified?
- Does the culture support growth?
- Is the seller trustworthy?
- Is the market stable?
- Does the structure protect cash flow?
If too many answers point to risk, I don’t hesitate. I walk.
Final Thoughts
The deals I didn’t do have been just as important as the deals I did. Each time I turned away from a business, I added another layer of wisdom to my playbook. Those decisions protected my capital, preserved my energy, and sharpened my instincts.
When people ask me what makes a good buyer, I tell them it’s not just about spotting opportunities. It’s about having the discipline to say no when the risks outweigh the rewards. That discipline is what keeps me in the game for the long term.
I share more about my acquisitions, including both wins and near-misses, at DrConnorRobertson.com, where I continue to document the lessons I’ve learned deal by deal.