How to Buy a Business

The Short Version

Buying a business is one arc: decide the work suits you, find a sound company, agree a price built on its earnings, finance most of it with an SBA acquisition loan and a slice of your own cash, verify the numbers in diligence, and take over. Most first-time buyers pay in the low-to-mid six figures for a bank-financeable business and finance the bulk of it. The rest of this page is that arc in order, each step linked to the tool or data that works it. To walk it as a sequence, start the Searcher's Roadmap.

Decide It Fits You

The first decision is not which business but whether the path fits your money, time, and temperament. A search runs a year or two before you own anything, and the work starts, not ends, at close. Read your own readiness honestly with the Search Readiness Check, weigh buying against staying employed on the Buy vs. Career Comparer, and see which funding path fits with the Path Quiz. If the search-fund model is new to you, What Is a Search Fund? explains it and its variants.

Know the Money

Know the all-in number before you look, so a good deal does not slip for a cost you did not plan for. How Much Does It Cost to Buy a Small Business? breaks down the price, the cash at close, the deal costs buyers miss, and the runway to search. If the equity injection is the obstacle, How to Buy a Business With No Money covers the low-cash structures that genuinely exist and their limits.

Find a Business

Deals come from three places: on-market listings through brokers and marketplaces, off-market outreach to owners directly, and the network around a specific industry. Write down what you are actually looking for first with the Buy Box Builder, size how many targets that leaves with the Deal Flow Sizer, and compare the places to source on the reviewed directory. Knowing the trade before you buy into it matters as much as the deal: the industry buy guides cover what decides a deal in each one.

Value It and Make an Offer

Small businesses are priced on earnings times an industry multiple, not on assets or asking price. Build the true owner earnings and apply the cited band on the Business Valuation Calculator, pressure-test the whole deal against the SBA structure with the Underwriter, and when the number holds, put it in writing with the LOI Terms Worksheet. Each industry guidecarries the trade's own cited multiple range and the levers that move it.

Finance the Purchase

The standard structure at this scale is an SBA 7(a) loan covering most of the price, an equity injection of at least 10% of the total project cost, and sometimes a seller note on full standby filling part of that injection. Lenders underwrite to a debt service coverage ratio of about 1.25, so the cash flow has to clear the payment with room to spare. Model it on the SBA Acquisition Calculator, total the real project cost on the Sources & Uses Builder, find an active lender with Lender Match, and see which banks actually fund your industry in the acquisition-lending data.

Verify It and Close

Between offer and close you verify that the earnings you are paying for are real. Scope a quality of earnings review with the QoE Scope Builder, work the Diligence Checklist from your side of the table before any surprise becomes a retrade, and total the cash you actually need on closing day with the Closing Day Funds tool. The day you own it is day zero of the First 100 Days plan.

Walk the Full Path

Each step above has a stage in the Searcher's Roadmap, which sequences the whole journey from deciding to buy through the first hundred days of ownership, with the tools and data threaded in at the moment each one is useful. If you are at the very beginning, the 90-day syllabus is the gentlest on-ramp.

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