Their legacy.
Your turn.

A buy box is a short description of the business you want: the trade, the size, where it is, how involved you plan to be and how you'll pay for it. Brokers and owners answer buyers who have one.

What to read

• 1.1 Your buy box: what you are actually looking for
• 1.2 What goes in a buy box

You don't need every advisor signed up before you start looking, but you need them lined up before you make an offer. That means an M&A attorney, sometimes called a business transaction attorney, not the lawyer who handled your house closing. Add a CPA who has worked on acquisitions and a lender who closes acquisition loans. Some buyers also bring in a buy-side advisor or join a buyer advisory group to help find businesses and guide them through the rest of the process. Every deal is different, and having people to consult at each step makes a real difference.

What to read

• 2.1 Finding the M&A attorney, CPA and advisors who have done this before
• 2.2 Choosing a lender: SBA and the other options
• 2.3 Buy-side help: advisors who search for you
• 2.4 The personal guarantee

Your ceiling comes from two places: the cash you can put in and the debt the business itself can carry. An SBA acquisition loan needs at least 10 percent from you, and the business has to cover its loan payments with room to spare. You'll also need cash to run the business after closing, and that working capital can be built into the loan or set up as a line of credit alongside it.

What to read

• 3.1 How people pay for a business, and the cash you need up front
• 3.2 How a lender looks at you
• 3.3 Getting pre-qualified, and why it helps
• 3.4 Your ceiling, and how debt service sets it
• 3.5 When real estate comes with the business
• 3.6 What's left after the loan payment
• 3.7 Checking your own finances before the bank does

Many businesses for sale are listed with a broker, and plenty of good ones are never listed at all. Brokers and owners hear from far more buyers than will ever close, so a clear buy box, a pre-qualification letter and a short first message do most of the work of getting answered.

What to read

• 4.1 Where these businesses actually are
• 4.2 Getting on a broker's radar
• 4.3 Approaching owners directly
• 4.4 What sellers and brokers ask about you
• 4.5 What to say when you reach out
• 4.6 Working with a broker: what they do and who they work for

Most businesses you look at won't be the one, and finding that out early is the point. Sign the NDA, read what the seller sends, check what the business really earns and know which findings end a look before you spend money on it.

What to read

• 5.1 The NDA and what you get for signing it
• 5.2 Reading what the seller sends: the listing, the CIM, and what to do when there isn't one
• 5.3 What the business really earns: SDE, EBITDA and add-backs
• 5.4 What a business like this is worth: size and the multiple
• 5.5 Deal breakers worth spotting early
• 5.6 The first conversation and the visit

Also here: The questions to ask, by stage · The glossary

How you pay matters as much as how much. The letter of intent sets the price, the structure and the time you get to check the business. Most of it isn't binding, but the exclusivity and confidentiality terms are.

What to read

• 6.1 Price and terms are not the same thing
• 6.2 The indication of interest
• 6.3 What a letter of intent commits you to
• 6.4 Seller notes, and why an SBA buyer cannot offer an earnout
• 6.5 Working capital as a negotiated term
• 6.6 Buying the assets or buying the company
• 6.7 Exclusivity, and whether there's a deposit

Also here: The letter of intent, annotated

This is where you confirm the earnings against tax returns and bank statements, meet the people who matter and read the leases and contracts. Many deals fall apart here, and walking away at this stage is often the right call.

What to read

• 7.1 Checking the money, and why a quality of earnings report is worth it
• 7.2 The people: who stays, who leaves, and what they're owed
• 7.3 Customers: who they are, how concentrated, and whether they'll stay
• 7.4 Leases, equipment and the building
• 7.5 Licenses, permits, bonding and insurance
• 7.6 Walking away, and why it isn't a failure

Also here: Diligence, item by item · The documents to ask for

While you check the business, the lender runs its own review, orders its own valuation and works toward approval. You set up the company that will own the business, arrange the insurance the lender requires and work through the lease and the purchase agreement with your M&A attorney. Buyers who wait to start this until diligence is done add weeks.

What to read

• 8.1 The lender's process, start to finish
• 8.2 The lender's valuation and appraisal
• 8.3 Standing up the entity and the bank accounts
• 8.4 Life insurance and the collateral assignment
• 8.5 The lease
• 8.6 The purchase agreement

Also here: The SBA loan, start to finish

The final stretch is paperwork, money and sometimes one more conversation about price. Know what you will sign, how much cash you need at the table and what tends to go wrong in the last few weeks, so it doesn't happen to you.

What to read

• 9.1 When diligence changes the price: the retrade
• 9.2 What you will sign
• 9.3 Money at the table
• 9.4 What kills deals in the last thirty days