No matter how complicated a deal gets, remember to keep focus on one goal: buying a business for as little as possible. This playbook is a compilation of various methods that work on unsuspecting founders. Every. Single. Time. Consider this your game plan before your next M&A transaction. So, zip up your Patagonia vest and let’s dive in. The Opening Drive Assuming you’ve already finished your 1,000 stomach crunches and morning skincare routine, you can get started with any of the following three plays. In fact, the first three plays actually happen before the seller even realizes the game has started. The QoE Chop Block Pay top dollar for a “high-quality” Quality of Earnings firm. You’re not using them to find the truth but to manufacture doubt in the opponent. The right QoE firm will hunt down any adjustments, question add-backs, and scrutinize revenue. By the time they’re done, the seller’s trailing twelve months looks like a business falling apart. The beauty of this play is that you didn’t say it, they did. You come in as the hero trying to save the deal even though the business looks worse than reported. You consult the business owner that the broker was trying to lure them in thinking they could sell for a higher price, just so they could win the seller’s trust, business, and money The False Consensus Audible Your aim here is to get the seller looking one way while you make changes they don’t even know about. When you deliver the adjusted numbers, deliver them without blinking. Tell the seller something along the lines of “This is just how every serious buyer is going to look at it.” Don’t enter the room ready to negotiate but rather to report on your CPA’s QOE findings. All of a sudden, the seller will start wondering if maybe they were wrong about their own business. That self-doubt is worth more than any single line-item adjustment. The Time Machine Sweep Inflate future costs and projections. It’s a sandbox for you to play in since the future can be anything you want it to be. Plan some new hires at a high price just to right the ship, set up a new ERP system, demand a higher paying CFO because their books were a mess! If they’re smart, they’ll know that what you’re really saying is: I’m going to pay you less for what you already built. It sounds reasonable. It is not. The Midfield Grind This is where you can turn your patience into a weapon. If things get too slow, you can always redesign your business card. Subtle coloring, tasteful thickness, and watermarks are all the rage nowadays. The Clock Drain Draw Time is the seller’s enemy the moment they’re under LOI. Most sellers will get excited enough to share the news with their spouse, maybe some employees, and for sure their own mind. They’re likely already looking up condos in Florida. Once you know that, you should know that every week you can create some delay will tighten that psychological vice. Get creative here by messing with timelines, requesting more data, scheduling “check-in” calls, etc. The Thousand Cuts Option Nobody retrades by $2 million upfront. You do it in $200,000 increments, each tied to a specific diligence finding. A lease that wasn’t flagged. A customer contract with a change-of-control clause. A receivable from a client that went out of business. While none of these move the needle alone, all of them together absolutely do. By the time the seller realizes what happened, they’ve already conceded the framing on each individual issue. Death by a thousand cuts. The Concentration Zero Blitz Every business has real risks. Your job is to take those risks and make them feel existential. Customer concentration at 30%? “That’s a cliff.” One key supplier? “Single point of failure.” Revenue dipped one quarter? “We’re seeing early indicators of structural churn.” Employee who does it all with no known procedures? “We have to factor in getting hit by a bus.” Even though you may be looking a small deals under $50 million, you should treat it like it’s a billion dollar unicorn. Any hairiness to the deal means the seller needs to take a haircut. The Red Zone If you’ve made it this far, great work. Take a break and listen to some Huey and the News. Their undisputed masterpiece is ‘Hip to Be Square,’ a song so catchy most people probably don’t listen to the lyrics. Anyways, you’re close to the goal line now, and this is where the real money gets made or lost. So don’t get conservative. The Earnout End Around Keep the headline number intact. Just move the value out of upfront cash and into earnouts, holdbacks, and indemnity escrows. Some trusting sellers tend to only think about price, so if you keep it the same, they’ll be happy. If you run this play, though, they’d actually be getting is a fraction of it at close. The rest would be contingent on hitting targets they no longer control. Did someone say Net Present Value? Guess who controls the keys to hitting those targets. The Working Capital Sneak Define a “normalized” working capital target that’s higher than historical reality. Guaranteed it won’t come up until closing. By then, the seller will be exhausted with the whole process and just want things to be done. That delta comes straight out of proceeds. It’s one of the cleanest, most invisible reductions in the entire playbook. Great for essential services. The One-Time Fleaflicker Assuming the business is trending up, you can’t ignore it. You can, however, try to neutralize it. Accept that there’s growth, but call it a one-time deal. Or say it’s far too late in the deal to look at more months and roll forward would slow up closing. You have a mandate and timeline to hit. Anything that keeps the multiple anchored to a trough rather than a trend. The Final Whistle If you’ve been around the block, you’ll know these plays aren’t anything new. This is the first time they’ve been written down for your benefit, though. None of these plays work in isolation. The QoE Chop Block sets up the False Consensus Audible. The Clock Drain Draw makes the Thousand Cuts Option land harder. The Fog Machine Blitz makes the Earnout End Around feel like a relief. Unfortunately, it goes both ways. If your opponent signs up for a reputable QOE provider like QOE Prep, they can interrupt the process and send things spiraling. Before you know it, you’ll have a fair, respectable transaction on your hands. Even worse, they’ve got a service offering called the QoE Challenge that your seller will hopefully avoid. So, be sure that your opponent never stumbles across this website and sets up a call with the founder. Rumor has it that they are now offering $1,500 for an introduction that leads to a QoE.