Set non-negotiable limits for industry type, business size (revenue/profit), and geography.
Analyze the Confidential Information Memorandum (CIM) , which is the seller's sales pitch. Look for "red flags" like owner dependency (the business can't run without the current owner) or vague financials. 3. Valuation and the Letter of Intent (LOI)
Before looking at listings, define your "buy-box" or target criteria. how do i buy a small business
Small businesses are commonly valued at 2x to 4x their Seller’s Discretionary Earnings (SDE) or EBITDA.
Use online marketplaces like BizBuySell or DealStream , or work with brokers who have access to unlisted deals. Set non-negotiable limits for industry type, business size
To see detailed financial data, you must sign a Non-Disclosure Agreement (NDA) .
Once you know what you want, begin searching for opportunities. Use online marketplaces like BizBuySell or DealStream ,
You will need specialized help to avoid costly mistakes. This team typically includes a business attorney , a CPA or accountant , and potentially a business broker . 2. Sourcing and Initial Screening