Tomorrow’s Fortune

Welcome to the action-packed newsletter designed to help you navigate the world of business and investing. If you missed last week’s post, check it out here. 😎 

Today’s Digest: 

• Business Buying Mistake: Learn the three mistakes that cost buyers millions when trying to buy a business - their loss… your guidance

• What’s Happening in the Markets? Stocks nearing all-time highs, fast casual dining slowdown, ChatGPT download revenues soar and China’s AI desert hubs

• Wanna Buy a Business? We found a cash flowing Title & Abstract firm in Texas ($216K of Cash Flow). Click HERE for the listing

TOP STORY

Mistakes to Avoid When Buying a Business

Met a fellow investor (a first-time buyer) who closed on what seemed like a perfect $8M manufacturing business: 20% margins, loyal customers, retiring owner.

Eighteen months later?
They were forced to sell at a steep loss — down ~$2M in equity.

Here’s what went wrong (and how to make sure it never happens to you).

1️⃣ Skipping the Quality of Earnings (QoE)

What It Is: A deep dive by a third-party accounting firm to verify true cash flow and revenue quality.

What Happened:

• Relied on seller’s QuickBooks + tax returns.

• Discovered a “major customer” was just the seller’s cousin’s shell company.

• Warranty expenses were understated.

• EBITDA overstated by 25%.

If you can afford the business, you can afford the $20K–$50K QoE. PE firms never skip this — neither should you.

2️⃣ Using the Wrong Lawyer

What It Is: Business acquisitions have unique legal traps: earnouts, working capital adjustments, reps & warranties, non-competes.

What Happened: