What unopened checks, weak systems, and loyalty taught me about due diligence
There is something about being underwater that clears your head.
When you descend, the noise disappears. The phone cannot ring. No one can email you. No one can argue. You check your gauges. You control your breathing. You move slowly. Deliberately. Every action has consequence.
Scuba diving has always given me clarity. It forces discipline. It rewards preparation. It punishes carelessness.
Ironically, one of the worst business decisions I ever made started because of that clarity.
I invested in a dive shop.
And it cost me far more than money.
This is a story about investing in a small business owned by friends. What I thought was a small business investment built on trust turned into one of the most expensive lessons of my career.
Why I Invested
I had known the owners for years. They were friends. Good people. Hardworking. Passionate about diving.
The shop was struggling. Retail is tough. Margins are thin. Inventory is expensive. And like many small businesses, they were trying to grow their way out of operational friction.
They needed capital. They needed structure. They needed someone who understood business systems.
At the time, investing in a small business that aligned with my passion felt like the perfect move.
I had built companies. Scaled them. Fixed broken operations. I believed I could help.
But this was not just a financial investment.
It was emotional.
I loved diving. It gave me mental clarity when nothing else did. The idea of owning part of a dive shop felt right. It felt aligned. It felt like I could merge passion with discipline and build something meaningful.
That’s where the first mistake started.
When passion enters the room, math quietly leaves.
The Due Diligence I Thought Was Enough
I reviewed financial statements. I looked at debt. I reviewed revenue trends. I asked questions.
They showed me numbers.
On paper, it was stressed but survivable.
I did what most small business investors do. I relied on what was presented. I assumed the books reflected reality. I believed what I was told.
Here is a truth most people do not want to admit:
Limited due diligence reveals what is recorded.
It does not reveal what is hidden.
If the internal systems are weak, the data is weak.
And weak data creates false confidence.
When you are investing in friends, skepticism feels like betrayal. So you compress it. You soften your questions. You trust explanations that would otherwise require verification.
Trust is human.
Verification is professional.
I leaned too hard on the first and not enough on the second.
The Death That Changed Everything
Shortly after I became a partner, one of the owners passed away.
She was also the office manager. She handled the books. She handled mail. She handled receivables and payables.
Her husband, the other owner, understandably lost interest. Grief does not make room for operational discipline.
The business, which had already been fragile, now had no financial heartbeat.
It all landed on me.
I walked into the office believing I would stabilize it.
What I found instead was something very different.
The Week in the Office
I spent a week going through drawers.
Opening envelopes.
Digging through stacks of mail that had been shoved into cabinets.
I found unopened bills. That did not surprise me.
What shocked me were the checks.
Customer checks.
In unopened envelopes.
Some were nearly a year old.
Customers had paid. The business had received the mail. The checks were never deposited.
They were shoved into drawers next to unpaid vendor invoices.
It was not fraud.
It was dysfunction.
There was no system for incoming mail. No receivables tracking. No reconciliation process. No discipline around cash.
Money had come in. And it had just… sat there.
I spent days calling customers asking if they could reissue checks.
Most were understanding. Some had already reconciled their own books and could not. It had been too long.
You cannot build stability on that foundation.
You cannot market your way out of that.
You cannot expand inventory and “grow revenue” when you do not even know what has already been paid.
What I discovered that week was not just sloppy bookkeeping.
It was systemic chaos.
The Truth Beneath the Surface
Underwater, what you see is rarely the full picture. Currents move beneath you. Depth deceives you. If you do not check your gauges, your perception will lie to you.
On land, financial statements can do the same.
The debt load was larger than presented. Obligations had been pushed forward. Vendors had extended grace that was not permanent. Cash flow assumptions were optimistic at best.
The business had survived on relationships and memory.
Not process.
There was no clean reconciliation rhythm. No monthly discipline. No visibility beyond what someone could remember off the top of their head.
I have built companies with less revenue and more clarity.
Clarity matters more than revenue.
Without visibility, growth accelerates failure.
Putting a Bandage on a Bullet Hole
I tried to stabilize it.
We implemented structure. We cleaned up receivables. We reorganized vendor relationships. We assessed inventory turnover. We cut unnecessary spending.
But there is a difference between repairable and terminal.
If the financial wound is too deep, new systems cannot reverse old damage fast enough.
Sometimes you are not performing surgery.
You are applying a bandage to a bullet hole.
And that is what this was.
The capital I invested bought time.
It did not buy viability.
Eventually, the math caught up.
We made the decision to close.
The Cost
Financially, I recovered pennies on the dollar.
And some very nice dive gear.
But the real cost was not the money.
It was clarity.
It was the realization that I had allowed passion and friendship to override professional discipline.
It was the recognition that I had stepped into something I wanted to believe in, rather than something that was objectively investable.
I felt bad for them. They were not malicious. They were overwhelmed.
But they did take my investment.
Intent does not offset consequence.
What I Learned About Investing in a Small Business
If you are considering investing in a small business, especially one owned by friends, read this carefully.
- Friendship is not a financial control.
Good people can run bad systems. - If the books are unclear, assume reality is worse.
Ambiguity is not neutral. It is risk. - Verify cash. Always.
Not just revenue. Cash. Deposits. Reconciliation history. Bank statements. - Do not invest to “save” something.
Invest because the fundamentals are strong and your capital accelerates strength. - If you cannot walk away emotionally, you should not invest.
The hardest part of this experience was not the loss.
It was admitting I should have known better.
I have spent decades fixing operational friction for companies.
And yet, in this case, I stepped into a situation where friction was not the issue.
Structural failure was.
The Bigger Problem Most Small Businesses Have
Most small businesses do not fail because of lack of effort.
They fail because of lack of discipline.
Mail does not get opened.
Receivables do not get reconciled.
Vendor balances are assumed, not verified.
Growth is prioritized over visibility.
Owners tell themselves they will “clean it up later.”
Later never comes.
You cannot scale chaos.
You can only amplify it.
What I found in that dive shop was not unusual. It was common. I have since walked into other businesses with similar dysfunction hiding behind surface-level revenue.
If you do not know exactly what your financial position is at any given time, you are not operating a business.
You are operating a hope.
Hope is not a strategy.
What Diving Taught Me That I Ignored
When you dive, you check your gauges constantly.
Air pressure. Depth. Time.
You do not assume.
You verify.
If your gauge reads low air, you do not argue with it.
You ascend.
In this investment, I ignored my gauges.
I saw warning signs. Vague answers. Incomplete systems. Too much dependence on one person. Weak documentation.
But I wanted it to work.
And wanting something to work is not the same thing as it being sound.
Clarity underwater is survival.
Clarity in business is no different.
The Expensive Lesson
This was one of the most expensive lessons I have learned.
Not because of the dollar amount.
But because of what it exposed.
I learned that passion clouds math.
I learned that trust without verification is optimism disguised as professionalism.
I learned that not every business deserves saving.
And I learned that discipline must come before expansion.
If you are investing in a small business, slow down.
If you are running one, build systems before you seek capital.
Because investors do not just fund your dream.
They fund your discipline.
Underwater, you cannot fake preparation.
On land, you can pretend for a while.
Eventually, the pressure reveals the truth.
And sometimes, by the time you realize how deep you are, the only thing left to do is surface and accept the lesson.
This one cost me money.
It bought me clarity.
And clarity, when it comes the hard way, tends to stay.
Ryan Gartrell
Builder. Investor. Writer.
I’ve learned most of my best business lessons the hard way. I share them so you don’t have to.
