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
The following steps outline the typical acquisition path from initial planning to closing the deal. 1. Preparation and Self-Assessment how do i buy a small business
Set non-negotiable limits for industry type, business size (revenue/profit), and geography. You will need specialized help to avoid costly mistakes
Small businesses are commonly valued at 2x to 4x their Seller’s Discretionary Earnings (SDE) or EBITDA. Sourcing and Initial Screening The following steps outline
Once you know what you want, begin searching for opportunities.
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.