E278: Buyer Beware: Jed Morris Exposes the Hard Truths Behind Business Acquisitions

How2Exit: Buy, Don't Build - M&A of Small Businesses

Watch: https://youtu.be/I8AUgv479HA
About the Guest:
Jed Morris Jed Morris is the Managing Partner of Sunset Coast Partners, an independent sponsor firm focused on acquiring defense contractors. A former Air Force veteran and Microsoft engineer, Jed’s journey into entrepreneurship was marked by soaring ambition — and a brutal, humbling failure that left him facing nearly $1 million in personally guaranteed debt. Rather than hiding, Jed leaned in, building a growing community of fellow acquisition entrepreneurs committed to telling the full truth about the real risks behind buying businesses. He now actively shares his hard-won lessons through his writing, speaking engagements, and his "Start Searching Challenge" program for first-time buyers.
Summary:
In this raw and revealing conversation, Ron Skelton sits down with Jed Morris, Managing Partner of Sunset Coast Partners, to unpack the brutally honest realities of buying small businesses. A fellow veteran and self-funded searcher turned investor, Jed shares his journey from military service to big tech — and then into the world of business acquisitions, including his painful first-hand experience with failure, personal guarantees, and crushing debt. This isn't a feel-good "buy a business with no money down" fantasy — it's a boots-on-the-ground look at the risks, the egos, the missteps, and the hidden hazards first-time buyers need to face if they want a real shot at success. Far from doom and gloom, the episode offers sharp wisdom for new buyers: how to approach culture shock, why the "passive ownership" myth is dangerous, and the reality that buying a business means buying people first. It's a masterclass in what can go wrong — and what it actually takes to do it right.
Key Takeaways:

1. Buying businesses is buying culture, not just cash flow.
   Success hinges more on managing people and adapting to inherited cultures than on financial spreadsheets.
2. "No money down" deals are real — but extremely rare and dangerously hyped.
   Buyers pursuing these unicorns must be ready for much higher risk profiles and massive deal flow effort.
3. First-time buyers drastically underestimate change management.
   Rolling into a 30-year-old business and expecting quick improvements without cultural buy-in is a recipe for revolt.
4. Early relationships with PE firms and investment bankers are critical.
   If you're planning to flip a business to private equity later, you better design the acquisition and growth with their preferences from day one.
5. In distress, culture collapses faster than cash flow.
   When things go wrong, the hidden dynamics — loyalty, trust, morale — become your battlefield, not just your P&L.
6. Defense contracting offers real opportunity, but brings unique barriers.
   Issues like security clearances, government contract classifications, and niche buyer pools make it a specialized but lucrative target market.
7. Surviving business ownership demands humility, patience, and real respect for frontline workers.
   Ivy League degrees and fancy vests won't save you from getting "eaten alive" if you can't relate to your workforce.
8. Building for an exit must start before you buy.
   If you don't know what a future buyer needs — team, systems, margins — you're not "building to sell," you're just surviving.

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Contact Jed on
Linkedin: https://www.linkedin.com/in/jedmorris/
Website: https://jedbmorris.com/
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