In this episode, Tim breaks down a real-world post about a struggling food business where the seller is trying to recover build-out costs despite little to no profit and a long-term, expensive lease.

Tim explains why this situation is a textbook example of the sunk cost fallacy, why buyers often confuse assets with value, and how leases, franchises, and zero cash flow can quietly turn a "deal" into a long-term financial burden. He also discusses the difference between running a healthy business and trying to turn around a failing one—and why most buyers underestimate that gap.

Tim Delaney is an entrepreneur who believes everyone should explore the opportunities that business and real estate can provide on the path to financial freedom. He owns and operates a wine & liquor store, a software startup, a consulting company, and a growing portfolio of commercial and residential real estate.

Tim's passion for independent business has led him to support dozens of other business owners. For over a decade, he has worked with businesses on strategy, processes, finances, and marketing. These experiences, along with analyzing dozens of other businesses for potential acquisition, have provided Tim with an immense knowledge base to pull from.

Tim has appeared on multiple top-tier podcasts in the financial space, such as Bigger Pockets Money and The Freedom Chasers Podcast.

[00:00 – 02:15] Is a $200K Build-Out Still Worth $200K?
Tim opens with a simple but critical question: if a business isn't profitable, does the money spent building it out matter at all?

[02:16 – 05:00] Breaking Down the Original Deal
Reviewing the details of the post: a struggling food business, $6,000 monthly rent, long-term lease, franchise involvement, and no meaningful profit.

[05:01 – 06:45] You're Not Buying a Business
Why this deal is really about taking over a lease and a space—not acquiring a functioning business.

[06:46 – 08:30] The Sunk Cost Fallacy Explained
What sunk costs are, why sellers fixate on them, and why buyers should never pay for money that's already gone.

[08:31 – 10:20] Lease Risk and Personal Guarantees
How long-term leases, rent obligations, and personal guarantees can quietly become the biggest threat to a buyer.

[10:21 – 12:30] What Is This Business Actually Worth?
Why a business with zero cash flow has little to no value, and why used restaurant equipment usually sells for pennies on the dollar.

[12:31 – 14:40] Franchise and Legal Red Flags
Potential issues with rebranding, franchise agreements, and trademark risks that buyers often overlook.

[14:41 – 16:30] Don't Pay for Someone Else's Mistakes
Why turning around a failed business requires a very different skill set—and why confidence alone isn't enough.

[16:31 – End] Final Thoughts
Cash flow is king. Without it, even a "great location" and expensive build-out can't justify a bad deal.

If you found value in today's show, make sure to subscribe so you never miss an episode packed with insights to help you buy and grow a business that creates real financial freedom.

Connect with Tim and the community:
Website: https://www.powerofbiz.com
YouTube: https://www.youtube.com/@powerofbiz
Instagram: @timtdelaney
Threads: https://www.threads.com/@timtdelaney
LinkedIn: linkedin.com/in/timothytdelaney
Facebook: facebook.com/timtdelaney

Tweetable Quotes:

"Money already spent does not equal value." – Tim Delaney

"If a business has no cash flow, it isn't a business—it's a liability." – Tim Delaney

"Confidence doesn't fix bad numbers." – Tim Delaney