I want to take a few moments today to tell you an absolutely terrifying story about a couple who were trying to buy a business. I was referred to by someone in my audience (thank you for that). They had found a business for sale and wanted help analyzing whether it was a good deal and if the asking price made sense. https://youtu.be/8lZ6i0jOgBQ
When I reviewed the business with them, I showed them something shocking:
The business was worth about one-quarter of the asking price.
That’s right. The seller was asking roughly four times what the business was actually worth.
Once they understood this, the couple quickly decided not to pursue the deal at all. The seller was so unreasonable that negotiation wasn’t even worth attempting.
I thought that was the end of the story.
But it wasn’t.
The “Pay to Peek” Trap
When I spoke with them again later, I discovered that before they came to me, they had already paid the seller money just to see the financial statements.
This is what’s commonly known as “pay to peek.”
Here’s how it works:
A seller says, “My information is confidential. If you want to see my finances, you need to give me a non-refundable deposit first to prove you’re serious.”
Let me be crystal clear:
This is insanity.
It’s like a real estate agent saying, “You might want to buy this house, but if you want to look inside, you need to pay me $100 first.”
No one would ever agree to that—yet people do it with businesses.
Unfortunately, this couple didn’t know any better.
Bad Advice From the Wrong Professional
What makes this story even worse is that they went to their lawyer and asked whether this was normal and reasonable.
The lawyer told them yes.
He drafted an NDA and paperwork stating that the money was a “deposit toward an eventual purchase.” Of course, the lawyer charged them a fee for this work as well.
When I heard this, I did a quick search and discovered something important:
This lawyer was well-known in immigration and real estate law not in business acquisitions or business brokerage.
And this is where a critical lesson comes in.
You Pay for Education One Way or Another
I recently came across a quote that applies perfectly here:
“In investing, you pay for your education one way or another.
Either you pay someone to teach you — or you pay through costly mistakes.”
This couple paid thousands of dollars to learn a lesson they should never have had to learn:
👉 You should never give a non-refundable deposit just to look at a business’s financials.
Looking at the financials is looking at the business. A business is not the four walls, the equipment, or the logo. It’s an economic engine—sales, expenses, and cash flow. Without seeing that, you cannot evaluate anything.
Why Education Matters
If instead of paying that seller and the wrong lawyer, this couple had taken my Business Buyer Advantage program, they would have learned:
How to properly evaluate a business
How to identify unreasonable sellers
How to hire the right professionals
And why “pay to peek” is a massive red flag
One of the biggest mistakes buyers make is assuming that any lawyer or advisor is the right one. They’re not.
If you want to help others avoid mistakes like this, please like and share this content. That’s how these lessons reach people before they lose money.
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