Define your buy box
Decide on industry, size (revenue and earnings), geography, and your role as owner. A tight buy box saves months.
Source deals
Combine marketplaces, business brokers, your network, and direct outreach to owners. Off-market deals often come from patient relationship-building.
Understand valuation
Small businesses are commonly priced as a multiple of seller’s discretionary earnings (SDE) or EBITDA. The multiple depends on size, risk, growth, and transferability.
Submit an LOI
A letter of intent outlines price, structure, financing, timeline, and exclusivity. Most terms are non-binding, but they set the tone for the deal.
Do real due diligence
- Financial: tax returns, bank statements, quality of earnings
- Legal: contracts, leases, licenses, litigation
- Operational: customers, staff, systems, key-person risk
Finance and close
Common structures combine buyer equity, an SBA 7(a) loan, and a seller note. Plan a transition period with the seller to protect relationships.