0015 - Hidden Dangers in Business Listings (And How to Spot Them)

Business Buying for Financial Independence

In this solo episode, Tim Delaney breaks down the five red flags you need to watch for when evaluating small businesses for sale. From mysterious add-backs to shaky contractor structures, Tim explains how to separate real opportunity from risky deals—and how to spot warning signs before you’re locked in.

Tim is an entrepreneur who believes everyone should explore the opportunities that business and real estate can provide on the path to financial freedom. He owns and operates a wine & liquor store, a software startup, a consulting company, and a growing portfolio of commercial and residential real estate.

Tim’s passion for independent business has led him to support dozens of other business owners. For over a decade, he has worked with businesses on strategy, processes, finances, and marketing. These experiences, along with analyzing dozens of other businesses for potential acquisition, have provided Tim with an immense knowledge base to pull from.

Tim has appeared on multiple top-tier podcasts in the financial space, such as Bigger Pockets Money and The Freedom Chasers Podcast.

[00:00 – 00:45] Intro

Tim sets the stage and explains why spotting red flags early is critical when buying a business.

[00:46 – 03:30] Red Flag #1: Mysterious Add-Backs

Why seller add-backs can sometimes be justified—but often hide inflated earnings.

[03:31 – 07:10] Red Flag #2: Shaky Leases

How unclear or unstable leases can sink a location-dependent business.

[07:11 – 12:00] Red Flag #3: Numbers Don’t Add Up

The danger when a seller can’t clearly explain their financials.

[12:01 – 17:00] Red Flag #4: “So Much Potential”

Why the promise of “potential” should make you stop and think twice.

[17:01 – 20:30] Red Flag #5: Contractor Structures

The risks of a workforce made entirely of 1099 contractors.

[20:31 – End] Outro & Takeaways

Tim’s closing advice on focusing on real cash flow, not empty promises when buying a business.

If you found value in today’s show, make sure to subscribe so you never miss an episode packed with insights to help you buy and grow a business that creates real financial freedom.

Connect with Tim and the community on social media for more tips and updates:

Website: https://www.powerofbiz.comYouTube: https://www.youtube.com/@powerofbiz Instagram: https://www.instagram.com/timtdelaney/ Threads: https://www.threads.com/@timtdelaney LinkedIn: https://www.linkedin.com/in/timothytdelaney/ Facebook: https://www.facebook.com/timtdelaney

Tweetable Quotes

“Mysterious add-backs are one of the biggest warning signs in a business listing.” – Tim Delaney “If the seller can’t explain their own numbers, that’s your red flag right there.” – Tim Delaney “There’s no such thing as ‘potential’ you don’t have to work for.” – Tim Delaney “Cash flow clarity beats growth promises every single time.” – Tim Delaney