The first thing I look for in any business I consider buying

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When people ask me what kinds of businesses they should be targeting for their first acquisition, I usually start with the same question:

Would this business still have customers if the economy turned tomorrow?

The answer to that question eliminates a large percentage of deals immediately, and it’s the foundation of how I evaluate every opportunity I look at.

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Zachary got hands-on guidance through diligence, negotiations, and structuring, and ended up making a great deal.

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Why recession resistance is non-negotiable for me

I look for businesses that serve needs, not wants.

There’s a version of the economy where people cut back on almost everything (dining out less, skipping vacations, canceling subscriptions).

But there are certain things that just don’t get cut, regardless of what’s happening in the broader economy.

• Taxes still get filed

• Payroll still needs to go out

• Pipes still break

• Lawns still need maintenance

• Facilities still need to be cleaned

Businesses that serve those needs tend to hold up remarkably well during downturns, and some of them barely notice a recession at all.

That’s the kind of durability I want in a business I’m going to put capital into and spend years building.

(In Acquisition Ace, members learn how to screen for recession-resistant businesses from the very beginning of their search, so they’re not finding out the hard way after a downturn. If you’d like to speed up the process of successfully buying your first business, book a call with our team here.)

What to avoid

Discretionary spending businesses.

Anything where customers are buying something they want rather than something they need are particularly vulnerable.

When budgets tighten, these are the first expenses to get cut.

The margins might look attractive in a good economy, but the risk profile changes dramatically when conditions shift.

Similarly, businesses tied to new construction are worth approaching carefully.

Construction is inherently cyclical.

When the market tightens, projects dry up and contractors feel it fast.

If you’re looking at a business like HVAC or plumbing that could be affected indirectly, pay close attention to who their primary customers are.

A company heavily dependent on home builders is exposed to that same cyclicality, and one with a strong base of residential and commercial service clients is a much more stable picture.

Before you buy, ask this question:

When you’re evaluating any deal, ask yourself: what would happen to this business’s revenue if we hit a period like 2008 or 2009?

If the honest answer is “it would take a serious hit,” that's a risk worth understanding clearly before you commit.

If the answer is “not much, people still need this regardless,” that's a business worth looking at more seriously.

Recession resistance isn’t the only thing that matters in a good acquisition.

But it’s one of the first filters I apply, and it’s saved me from a lot of deals that looked good on paper but would have been painful to own at the wrong moment.

If you want help finding businesses and industries that would make sense for you, your wants, and your needs, the Acquisition Ace community can help.

👉 Book a call with my team here to see if it’s a good fit for you.