Episode Summary:
In this critical episode of the Built to Sell | Built to Buy podcast, business coach Sam Penny dives deep into one of the most overlooked (yet most expensive) parts of buying a business: risk. Not revenue. Not growth potential. Risk — and how to spot it, quantify it, and price it into your offer.

Whether you're a first-time buyer or a seasoned investor, this session will change how you think about due diligence. Sam breaks down the 3 categories of risk every acquirer must assess — operational, financial, and transfer risk — and reveals the tactics smart buyers use to protect themselves and avoid overpaying.

Learn how to go beyond glossy pitch decks and charming sellers, and start stress-testing the business like a pro. You’ll walk away with real frameworks, tools, and a case study that shows exactly how to reduce risk — and price it into the deal.

🔍 What You'll Learn:

• Why most buyers overpay by ignoring risk
• The 3 core risk categories and how to spot red flags
• How to price risk into your offer and use it to negotiate better terms
• A real-world deal that looked great on paper… until it didn’t
• The tools elite investors use: checklists, red flag sheets, scorecards, and more

📚 Resources Mentioned:

• Free Due Diligence Checklist
• Risk Scorecard
• Red Flag Tracker
• Business Readiness Report
  👉 Available at sampenny.com

🧠 Quote of the Episode:

🎯 Call to Action:

💼 Buying a business? Book a free 30-minute strategy call to gut-check your deal before you sign:
👉 sampenny.com/strategy

🚨 Thinking about selling your business — now or in a few years? This episode is your blueprint. 🚨

Join business coach Sam Penny as he dives deep into the real reason deals fall apart — risk. Not revenue. Not EBITDA. Not potential. But perceived risk.

In this session, Sam Penny dives into how to properly de-risk your deal when preparing to sell. Making your business bulletproof involves removing yourself from daily tasks and ensuring smooth operations. By focusing on de-risking the deal, you make your business more attractive to buyers.

In this powerhouse episode of the Built to Sell | Built to Buy Podcast, you’ll learn exactly how to make your business irresistible to buyers by removing the silent deal killers hiding in plain sight.

🔎 What you’ll learn in this episode:

- Why buyers don’t pay top dollar for potential — they pay for certainty.
- The top 7 hidden risks that scare off serious buyers.
- The exact 5 Deal De-riskers™ Sam uses with his private clients to increase valuations by six figures (or more).
- How to systemise, stabilise, and scale — even if you're not ready to sell yet.
- A real-world case study where a business valuation jumped from $960K to $1.24M without changing profit.
- Why owner dependency, messy financials, and poor handover planning are destroying your multiple.
- How to flip buyer fear into buyer confidence — and command a better offer with cleaner terms.

✅ Whether you’re 12 months from selling or still building, this episode will:
→ Help you identify the risks you can't see because you're too close.
→ Give you a checklist to start removing deal-breakers today.
→ Show you how to increase the value of your business without increasing your profit.

🎯 Want to know how buyer-ready your business really is?
Grab your free Business Readiness Report at https://sampenny.com/readiness

🧭 Ready to work 1-on-1 with Sam to prepare for a high-value exit?
Book your free strategy call at https://sampenny.com/strategy

💡 If you’ve ever wondered:

→ “How do I sell my business for more?”
→ “What are buyers really looking for?”
→ “How do I remove myself from daily operations?”
→ “How do I increase my business valuation without burning out?”

…this is the episode you cannot afford to miss.

🎧 Listen on the go:
Spotify: Built to Sell | Built to Buy
Apple Podcasts: Built to Sell | Built to Buy

📌 Subscribe and turn on notifications so you never miss an episode.

#BuiltToSell #BuiltToBuy #SamPenny #BusinessValuation #HowToSellYourBusiness #ExitStrategy #DeRiskTheDeal #SmallBusinessAdvice #BusinessExitPlan #SellMyBusiness #BusinessBroker #BuyersDueDiligence #SystemiseYourBusiness #OwnerIndependentBusiness #IncreaseBusinessValue #RecurringRevenue #SOPs #CleanFinancials #BusinessReadiness #FreedomFromBusiness

Sam Penny delves into the intricacies of due diligence in business acquisitions, emphasizing the importance of interpreting data beyond the surface level. He outlines key questions buyers should ask, identifies financial and operational red flags, and discusses common seller tricks. Through a real case study, he illustrates how thorough due diligence can save buyers from overpaying and highlights the necessity of asking the right questions to uncover hidden risks. The session concludes with actionable steps for buyers to enhance their due diligence process and make informed decisions.

Takeaways

• Due diligence is about interpretation, not just verification.
• Ask the right questions to uncover hidden risks.
• Smooth financial numbers can indicate manipulation.
• Operational processes should be documented to avoid chaos.
• Normalization games can mislead buyers about profitability.
• Essential documents include detailed P&Ls and staff contracts.
• Direct questions to sellers can reveal deeper insights.
• Real case studies illustrate the importance of due diligence.
• Buyers should be suspicious and thorough in their approach.
• If it's not in writing, it doesn't exist.

Sound Bites

"Don't assume, interrogate."
"Due diligence is your filter."
"Buy it right."

Chapters

00:00 Introduction to Due Diligence
00:31 Understanding the Importance of Insight
00:31 Core Questions for Assessing Deals
00:39 Identifying Financial Red Flags
03:53 Operational Red Flags to Watch For
07:04 Normalization Games: Seller Tricks
10:14 Essential Documents for Due Diligence
13:40 Tools and Metrics for Interpretation
16:53 Asking the Right Questions
19:58 Real Case Study: Due Diligence in Action
23:06 The Golden Rule of Due Diligence
25:26 Next Steps for Buyers
42:07 New Chapter