E279: 94% of Buyers Never Close—Here’s Why the Best Deals Go to the Ones Who Don’t Pay the Most - Watch Here

🎙️ About the Guest: John Martinka

John Martinka is a veteran dealmaker who has spent nearly 30 years helping executives exit corporate life by buying businesses—and helping business owners exit with style and grace. Based in the Pacific Northwest, John runs Nokomis Advisory Services alongside his daughter, focusing on $5–15 million deals. He’s also the author of five books, including Buying a Business That Makes You Rich and If They Can Sell Pet Rocks, Why Can't You Sell Your Business?

Summary:

In this insightful episode of How2Exit, host Ron Skelton sits down with seasoned M&A advisor and author John Martinka, founder of Nokomis Advisory Services. With three decades of experience and five books under his belt, John shares a no-nonsense view of the acquisition world—highlighting why rapport trumps spreadsheets, how buyers sabotage themselves, and what sellers really care about when handing over the keys.

This episode is a goldmine for first-time buyers and retiring business owners alike. John deconstructs the psychology behind a sale, the pitfalls of MBA-fueled delusions, and the reality that good businesses do sell—just not always to the highest bidder.

📌 Key Takeaways:

1. People, not just numbers, drive deals: Relationships and cultural fit often outweigh the purchase price. If the seller doesn't like you, you won't get the deal—no matter what you offer.

2. Sellers want a safe pair of hands: Beyond valuation, owners care about who will take care of their people, their customers, and their legacy.

3. Most buyers never close a deal: John estimates 94% of buyers walk away without ever completing an acquisition. It’s not about funding—it’s about grit, relationship-building, and actually doing the work.

4. New buyers often ask for financials too soon: Many rookie buyers blow the deal by jumping to numbers without building trust. This is a relationship business, not just a spreadsheet game.

5. The “Ivy League trap” is real: Fancy degrees don’t mean you’re qualified to run a blue-collar business. Know the culture before you buy—or you’ll get eaten alive.

6. Forget perfection—buy a good business and go: In today’s climate, waiting to find a ‘perfect deal’ is a mistake. If the business fits your skill set and the seller trusts you, don’t sharpen the pencil—just close.

7. Due diligence goes beyond the books: Understand the customers, culture, suppliers, and lease terms. Financials alone won't reveal the real risks or opportunities.

8. Small business accounting is messy: Expect creative add-backs, non-GAAP practices, and a paper trail that takes digging. Don’t panic—but don’t blindly trust either.

Article:

“Why Rapport Beats EBITDA: Lessons from John Martinka on Buying Right and Selling Smart”

If you think buying a business is about outbidding the competition, think again.

In this episode of How2Exit, host Ron Skelton talks to John Martinka—an M&A veteran with nearly three decades in the game—about what really drives deals in the small business world. Spoiler: it's not the multiple.

The conversation kicks off with a story of serendipity. John got into M&A because someone in Rotary Club said, “You’d be good at this.” That chance comment sparked a 30-year career helping buyers escape corporate jobs and helping sellers exit gracefully. Today, John and his daughter run Nokomis Advisory Services, where she handles sell-side clients and he handles buyers—delivering boutique investment banking services to the lower middle market.

But don’t let the word “boutique” fool you. John’s insights are blunt, practical, and rooted in hundreds of real-world deals.

The rapport gap
At the heart of this episode is a simple truth: deals don’t fall apart because of money—they fall apart because of people. “If the seller doesn’t like or trust you,” John says, “they won’t hand over their company, no matter what you offer.” In an age where first-time buyers are flooding the market after watching a few YouTube videos or taking an ETA course, this lesson often goes unlearned until it's too late.

Ron echoes this from his own experience: buyers who rush into financials without building rapport might as well be ghosting the seller. Relationships take time—and in this business, they’re worth more than a few points off the multiple.

Harvard meets heavy equipment
One particularly revealing anecdote is about a fresh-out-of-Ivy-League buyer who wanted to acquire a construction company. The cultural mismatch was so obvious it became laughable. John and Ron dissect why some businesses—especially blue-collar ones—require hands-on experience, not just a spreadsheet MBA. “You're going to walk into a place where grown adults have fistfights once a month,” Ron says. “You ready for that?”

It’s not about being elite—it’s about understanding the culture of the team you’re about to inherit. Otherwise, they’ll reject you faster than you can say “six sigma.”

Sellers aren't desperate—they’re deliberate
Another myth John busts is that most sellers are in distress. Not true, he says. Most want to retire, slow down, or simply take the next step in life. The problem? Buyers think distress equals discount. But sellers—especially of well-run, profitable businesses—aren’t desperate. “The seller controls the deal when it’s a good business,” John states. “The buyer controls it when it’s a bad one.”

Why the numbers lie
Accounting in small businesses is like jazz—more improvisation than structure. John warns new buyers that many sellers run their books on a mix of QuickBooks, gut feeling, and “creative” add-backs. That doesn’t mean the business is bad—but it does mean you’ll need more than a surface-level understanding to uncover the real story.

Final advice? Pull the trigger.
The biggest risk? Indecision. In today’s uncertain economy, John tells buyers: if you find a business that fits your skills and you have seller trust—go for it. Forget squeezing an extra percent off the price. The cost of doing nothing is often far greater than the cost of slightly overpaying.

In short: don’t just be a trapper, waiting for the perfect deal. Be a hunter.

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