Buying a Business for Freedom: Jaryd Krause on Due Diligence, Deal Risk, and Knowing When to Walk Away

Jared Johnson sits down with Jaryd Krause, founder of Buying Online Businesses, to talk about how Jaryd went from working as a plumber in Australia to buying three businesses in three years and eventually building a career helping other entrepreneurs acquire companies. Jaryd shares how buying his first businesses allowed him to replace his income, leave plumbing, and build the lifestyle he wanted, while also learning that owning more businesses does not necessarily create more freedom.

They walk through Jaryd’s approach to helping buyers evaluate and acquire businesses, from establishing acquisition criteria and financing to finding deals, submitting an LOI, completing due diligence, negotiating terms, and supporting the buyer after closing. Jaryd explains why he looks closely at single-source dependencies, including reliance on one supplier, marketing channel, customer acquisition source, owner, or key employee, and why financial, marketing, and legal diligence can look very different from one transaction to the next.

The conversation also gets into the emotional side of acquisitions and why buyers sometimes struggle to walk away after investing months and thousands of dollars into a deal. Jaryd shares an example of a business where declining organic traffic was being offset by substantially higher advertising spend, information that ultimately led his client to walk away rather than inherit what Jaryd described as a potential million-dollar problem. Jared and Jaryd also discuss seller relationships, post-close growth, AI, changing marketing channels, and why listening to customers remains critical as businesses evolve.

Main Takeaways:

- Buying an existing business can provide an alternative to building a startup from scratch, but acquiring multiple businesses can also work against the lifestyle a buyer originally wanted

- Acquisition criteria should be built around the buyer’s available cash, financing capacity, goals, and the type of business they are equipped to own

- Single-source dependencies involving suppliers, traffic, revenue, owners, or key employees can create significant risk and should be investigated during diligence

- Financial diligence is only one part of the process; marketing, legal, operational, and dependency risks also need to be understood

- Buyers should be willing to walk away when diligence reveals risks that materially change the deal, regardless of how much time or money they have already invested

- A seller’s willingness to