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

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.

Article:

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

There’s a reason why most business buying advice sounds too good to be true — because it is.

In this refreshingly raw episode of the How2Exit Podcast, Ron Skelton sits down with Jed Morris, Managing Partner of Sunset Coast Partners, to strip the shiny paint off the world of small business acquisitions. Together, they dismantle the myths that seduce first-time buyers: the "easy" no-money-down deal, the dream of passive ownership, the fantasy that you can stroll into a 30-year-old business and immediately "fix" it with some Facebook ads.

Jed's story is as instructive as it is painful. A veteran turned techie turned acquisition entrepreneur, he shares how a two-business merger seemed perfect on paper — until operational chaos, cultural landmines, and the crushing reality of personally guaranteed SBA loans left him with almost a million dollars in debt. No one tells you about the hidden risks when things go south. Jed's mission now is to make sure new buyers hear what he wishes someone had told him.

The conversation digs deep into uncomfortable but critical realities:

• Why buying a business means inheriting a culture — and how failing to adapt will destroy you faster than bad financials.

• How change management isn’t optional; it's survival.

• Why thinking you'll hire a professional CEO right out of the gate is a fantasy (unless your company is $10M+ and printing cash).

• And why building early relationships with investors and bankers is not just smart — it's mandatory if you want a lucrative exit.

Ron and Jed also explore the specialized world of defense contracting, a sector insulated from some economic turbulence but fraught with its own unique challenges, including government dependency, clearance requirements, and successor eligibility issues.

Ultimately, this episode isn't a warning against buying businesses — it’s a call to do it smarter, humbler, and with your eyes wide open. If you're planning to "buy then build," you'd better also be ready to "buy, bleed, and build" first.

This is a masterclass for anyone who still believes buying beats building — but knows only if you do it right.

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