Welcome to Upper Market

Each week, I (somehow) manage to stay consistent and search through business listings.

It’s a painful process, yet I manage to triumph against all odds.

Most listings are average. But when something looks decent, I share it.

What’s ahead in this newsletter:

Judgement flows through each stage of the acquisition process.

By its definition, it’s the ability to form an opinion and make a decision.

The most impactful of these, is what business to buy.

Judgement is a constraint because it not only impacts you when you act - but also when you choose not to act.

It can move you to the next step - or it can move you back to square one.

Thrilling.

It’s hard to have judgement when you “don’t know what you don’t know”

And because most people haven’t gone through the acquisition process before, their ability to form judgement isn’t that good.

It’s really difficult for me to make things harder than what they need to be - so even the process I go through in order to figure out best practises in judgment have become incredibly straightforward.

The question to ask:

“Does this decision (action or inaction) send me back to the starting line OR does it prevent me from reaching the next step in my goal”

During Your Search: Poor judgement shows up as inconsistent searching, relying only on businesses listed for sale and not having a clear idea as to what you’re looking for. It shows a lack of seriousness in the effort needed to find a good business

During Deal Selection: Poor judgement shows up as pursuing businesses that don’t fit your capability, your thesis, or your pathway. Ignoring obvious risks, or convincing yourself that you’ll “figure it out later.” It shows a lack of discipline in choosing what is actually worth owning.

During Valuation: Poor judgement shows up as stretching the numbers to make the deal work. Overestimating growth, over-adjusting earnings, or ignoring future costs. It shows a willingness to believe a story instead of accepting reality.

During Structuring: Poor judgement shows up as defaulting to simple deals instead of protected ones. Paying too much upfront, not aligning incentives, or avoiding structure because it feels complex. It shows a lack of understanding of how risk should be managed.

During Due Diligence: Poor judgement shows up as either trusting too easily or looking in the wrong places. Missing key dependencies, fragile revenue, or operational gaps. Or getting stuck trying to remove all risk. It shows a misunderstanding of what actually matters.

At the Decision Point: Poor judgement shows up as hesitation. Waiting for certainty, for validation, or for a perfect deal that doesn’t exist. It shows an inability to act when enough information is already available.

During Ownership: Poor judgement shows up as falling back into operating the business instead of controlling it. Growing too early, lowering standards, or assuming the system will hold without reinforcement. It shows a failure to step into ownership.

So - what’s good judgement?

Good judgement is the ability to make the right call with incomplete information — and stand behind it.

Judgement isn’t something you’re given. It’s something that is built.

And it doesn’t come from sitting on the sidelines trying to think your way into it.

It comes from exposure and doing.

Seeing enough businesses, enough operators, enough outcomes (good and bad) that you start to recognise what you’re actually looking at. What holds. What breaks. What looks solid but isn’t.

Without working the judgement muscle, everything will keep looking the same.

Short Summary:

I regret to inform you that this week - there were no deals that I found which were interesting.

Yes, I too, was shocked.

We had been on a roll. Plenty of good stuff has been coming onto the market this year. I’m sure that some of the deals are still there.

My goal, has always been to give you stuff that’s fresh from the listing platforms.

But these have all kinda sucked.

Small franchises with limited growth. Small businesses that I cannot see a line for a modest acquisition spree. Zilch.

Really, I did do my best.

Sometimes it’s best to stay put and fold a hand - which is what we’re doing this week.

The lesson is simple: we don’t want to be owning something that we shouldn’t.

Find me something more appealing that a must have B2B solution which requires ongoing compliance and is service based?

You could, but this still doesn’t mean that this isn’t a turn on.

What stands out here, is that there are three divisions that reinforce each other. Health & Safety, Drug Testing & First Aid & Emergency Care.

Different revenue streams. Same core function from an operation perspective

The earnings are above the threshold you want as an acquirer with a pretty reasonable sticker valuation. You’re sub 2.5x. Even if you need to backfill some of the leaving owners responsibility, there’s a strong chance you’re going to be buying under 3x.

From a financial and structural perspective, it looks like it could be a winner.

What I’d Want to Understand

First is where the money is really coming from.

Split out the services - which is more profitable and by how much? This could lead to some kind of concentration risks

That could compound based on who is fulfilling the work.

Not only could you have revenue weighted from one core offering, but also one core team member - check it out.

Second is capacity.

How many services can be provided co-currently? Can it take more or is staff/contractor production under utilised?

Importantly - how is this work allocated, scheduled and what constraints are we working with here? It seems like planning could is likely to be a core function. Is there a system to do this or is it vibe coded?

Third is how sticky the revenue is.

Are clients locked in through contracts? Potentially not, but what is the driving force behind revenue coming in.

If it’s repeated, on schedule and predictable, even better.

Fourth is people.

Who delivers the training? This is service based and if there are facilitators, how are they found, trained and remunerated?

If the lead time on getting a facilitator up to standard is long, then staff attrition could be very problematic.

Also - does the company hold the relationship with the clients? Or are the facilitators so customer facing that they hold the relationship?

The Drawbacks

You’re operating in a regulated environment.

That’s part of the appeal, but it comes with upkeep.

Your responsibility is to sift through all the legislation changes on behalf of your clients. You are effectively, interpreting the law for them to comply with. This needs to be maintained.

Mistakes carry real consequences.

Final Thought

This isn’t a “nice to have” service, it’s an obligation that people have and it makes them push buy.

If you’re the provider they trust to handle it, you have embedded demand and that counts for something.

If you want more details on either of these businesses or would like an introduction to the sellers, just reply to this email.

This coming Saturday (9am) we are kicking off the in person workshop.

Tickets are left here and I’ll be cutting the orders off Thursday this week (to allow for catering).

We’re running it from the beginning of the business acquisition journey to managing assets and growing a portfolio.

My goal is to deliver something personable, realistic and authentic to what the buying process and ownership journey is like.

We’ll talk strategy, thesis, finance, due diligence and post deal operations.

There’ll be some concepts released from my upcoming book and I look forward to seeing you there

Deuces