Diesel Is Up $2.49 A Gallon. Your Seller's P&L Isn't.

The number that matters most in this deal isn't on the P&L yet.

U.S. on-highway diesel averaged $6.199 a gallon the week of October 5, according to the Energy Information Administration. A year earlier it was about $3.71. That's $2.49 more for every gallon, a 67% increase in twelve months. Regular gasoline is up $1.23 a gallon over the same stretch. You can pull the weekly diesel series yourself on FRED.

Owners feel it. In BizBuySell's Q2 2026 Insight Report, 48% of business owners said higher fuel and energy costs had disrupted their business, and 63% said inflation is not easing. Those are the same owners sending you listings right now.

Here's the problem. The financials in that listing were built on a calendar that doesn't line up with the price spike.

Why the Trailing Numbers Are Lying to You

Almost every deal you look at gets priced off trailing twelve months. The broker uses it. The lender underwrites on it. Since October 1, SBA lenders have to underwrite on historical earnings, not projections. That makes the TTM the most important number in the room.

But a TTM is an average. If fuel prices jumped partway through the year, the trailing number blends two different businesses: the one that bought diesel at $3.71 and the one buying it at $6.20. The first half of the year makes the P&L look better than the business you'd actually own on day one.

Pay attention to what the seller isn't saying. Nobody is hiding anything here. The accountant is reporting exactly what happened. The problem is that what happened over the last twelve months is not what's going to happen over your next twelve.

And this isn't only trucking. Any business that runs vans, service trucks, or equipment carries this exposure. HVAC, plumbing, electrical, pest control, landscaping, pool service, delivery routes, mobile repair. A big share of the service businesses you'll see on any listing site put people in vehicles every morning.

Watch What Happens When You Run the Full Year

Let me show you on a composite deal. A field service business doing $2.0M in revenue. Before the spike, it earned $400,000 in SDE. Say fuel ran 6% of revenue at last year's prices, about $120,000.

Now run fuel up 67%. That $120,000 bill becomes roughly $200,000. The business just lost about $80,000 a year in earnings without losing a single customer.

If the spike only shows up in half of the trailing year, the TTM shows about $360,000 in SDE. That's the number on the listing. But at today's prices, the business runs at about $320,000.

Price it the way most buyers would, at 2.75x the TTM, and you're paying $990,000. With a clean 80/10/10 at 10.5%, your SBA payment is $10,687 a month and your total debt service is $133,192 a year.

On the TTM, your stressed coverage looks like 2.16x. It clears.

On the forward run-rate, it's 1.92x. It fails. And your real multiple isn't 2.75x anymore. It's 3.09x.

Here's the part that should make you sit up. That $80,000 fuel increase is 20% of the business's pre-spike earnings. My stress test knocks 20% off earnings to see if the deal survives a bad year.

On a fuel-heavy business, the bad year already happened. It just hasn't finished showing up in the numbers.

Priced at 2.75x the forward run-rate, this business is worth about $880,000. That's $110,000 less than the TTM price. Same business. Same customers. Different calendar.

I worked with a corporate executive last year who hit this exact wall on a landscaping company. Beautiful TTM. When we pulled the monthly P&Ls, the last four months told a completely different story than the first eight. He'd been about to pay for a business that no longer existed.

The Move on Every Fuel-Heavy Deal

I've been through enough energy spikes in 35 years to know they come in two waves. The first wave hits the cost line. The second wave hits the buyer who priced off numbers from before the first wave. You don't want to be the second wave.

So here's what I'd do on every deal with trucks in it.

Ask for monthly P&Ls, not just the annual. Annualize the last three to six months and put that next to the TTM. If the gap is big, that gap is your negotiation.

Find the fuel line and the surcharge line. What share of revenue goes to fuel? Does the business bill a fuel surcharge, and did customers actually pay it? A business that passes costs through is a very different deal from one locked into fixed-price contracts.

Check the contracts. Annual service agreements and municipal contracts often lock pricing for twelve months or more. If the business signed those at last year's fuel prices, the margin squeeze hasn't even started.

Price off the forward run-rate. Run your stress test on what the business earns at today's costs. That's exactly what I do when I run a deal through DealScore Pro. Plug in the current-cost SDE and the coverage tells you the truth.

Banks won't do this for you. The lender is required to look backward, and backward is exactly where the problem is hiding. Neither will the broker. His number is the TTM, and it'll stay the TTM until you put a different one in front of him.

Now, the other side of this. Fuel prices fall, too. If diesel comes back down, a business priced on today's costs hands you upside the seller never got paid for. You don't need to predict oil. You need to make sure the deal works if prices stay right here.

Buy the business you'll own, not the one the seller used to have.

Every buyer looking at service businesses this fall is reading the same TTMs. The ones who pull the monthly numbers will be paying for the business they actually get.

What This Means For You

If you're planning to acquire in the next six months and the business runs vehicles, ask for the last 12 monthly P&Ls before you make an offer. Price the deal off the most recent months at today's fuel cost, and if the seller won't share monthly numbers, treat that as your answer.

Want to see how I stress-test every deal against cost shocks, revenue dips, and hidden liabilities before I'd put a dollar at risk? I walk through the entire Bulletproof method in a free 28-minute masterclass.

Forward this email. Tell them to grab Mike's free book - Real Estate Is for Suckers: Buy a Business Instead. Same framework Mike uses to stress-test every deal.