Speed to No.
The most valuable skill in deal screening isn't finding the yes. It's how fast you find the no.
In deal screening, the most valuable skill isn't finding the “Yes.”
It's how fast you can find the “No.”
The Deal
A niche manufacturing company. Services high-net-worth residential clients.
Purchase price: $1M. SDE: $350K. A 2.8x multiple — common in the small business space.
Add working capital and closing costs: total deal size ~$1.2M.
Financing: 70% SBA, 20% seller note, 10% injection. Your check to close: $120K.
Free cash flow: $160K. DSCR: 1.85. Cash-on-cash: 130%.
On paper, this deal is exceptional.
The Kill Question
Then you ask one question: what does the owner actually do?
He is the artistic designer. The head of sales. The master coordinator who keeps every project on track.
For any business I buy, I need to install a GM within 90 days without running operations myself.
You cannot hire a single person with this owner's combined skill set. Not at any price.
The Math That Kills It
So you need multiple hires. Say two. A designer and a sales lead.
Market rate for both: $160K–$200K loaded.
Free cash flow was $160K.
You just eliminated it. Depending on hire quality, you are running negative.
That is not a business acquisition. That is buying yourself two new problems.
Pass. Next.
The Framework
I run this filter on 50+ listings a month using SearcherOS. Most are dead in 10 minutes. Owner-operator dependency. Revenue concentration. DSCR that does not survive a stress test.
The 2% that clear the screen are worth your time. The 98% are not.
Speed to No buys time. Time is the asset.
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Go Deeper
Want to talk through this?
I do strategy calls on OpenClaw, AI operations, and building autonomous systems.