Guides for people buying a small business
134 guides written for buyers, not sellers. Start with how to buy a business, then go deep on the part you are stuck on. Try the free SDE and add-backs calculator.
Buying a businessFinding and screening dealsEarnings, SDE and add-backsFinancing the purchaseHow valuation worksDue diligence and red flagsDeal terms, closing and handoverFranchise resalesIndustry guides
Buying a business: start here 15
The whole process, the decisions before you start, and the questions to ask. Topic page
- How to buy a business, step by stepHow to buy a business, step by step: set your criteria, find and screen deals, verify the earnings, make an offer, finance it, close and take over.
- Absentee owner businesses for sale: what the listing doesn't sayWhat 'absentee owner' businesses really involve, why a manager's salary must come out of SDE, how lenders view them, and a worked example.
- Boring businesses to buy: the criteria that matter (not a listicle)What makes a boring small business a good buy: recurring revenue, many customers, licensing moats, low tech risk, and the traps to avoid.
- How to buy a business that isn't for saleHow to approach owners of businesses that aren't listed: building a target list, what to say in a letter or call, and how to handle the first conversation.
- How to buy a failing business: opportunity or trap?How to buy a struggling or distressed business: find out why it's failing, asset vs going concern value, liabilities, financing limits and turnaround cash.
- How to buy a million dollar business: the numbers, worked throughA worked example of buying a $1 million business: equity, SBA loan, seller note, yearly payments, debt coverage and the earnings it takes.
- How to buy a small business: what's different about Main Street dealsHow to buy a small business: what's different about Main Street deals (SDE, SBA loans, owner dependence, messy books) and how to handle each.
- How to buy an existing business: what you inherit and what to verifyHow to buy an existing business: what you inherit (history, staff, customers, lease), why lenders prefer it, and what to verify first.
- How to buy into a business: what a minority stake really gets youHow to buy part of an existing business: what a minority stake gets you, operating agreement terms that matter, and checking the numbers anyway.
- How to buy out a business partnerHow to buy out a business partner: check the buy-sell agreement, value the share independently, fund it, and document it properly.
- How to buy your first business: a first-timer's playbookA first-time buyer's playbook: set a buy box, build your team, budget for diligence, run a search, and avoid the first-deal traps.
- How to start buying businesses: search funds, self-funded search and other routesHow people start buying businesses: traditional search funds, self-funded search, independent sponsors and SBA-financed solo buyers compared.
- Should I buy a business? An honest way to decideShould you buy a business? An honest self-assessment of money, risk tolerance, skills, time and family, with a simple decision tree.
- Small business acquisition: buying a business to grow the one you ownBuying another small business to grow yours: add-on acquisitions, the SBA Business Expansion rules, integration risks and checking the target's numbers.
- Steps to buying a business, with a realistic timelineThe steps to buying a business in order, with a realistic week-by-week timeline from first look to closing, and what slows each stage down.
Finding and screening deals 8
Where businesses for sale come from and how to screen a listing in an hour. Topic page
- Businesses for sale by owner: how to buy without a broker in the middleBuying a business for sale by owner: the upside of no broker, the downside of messy information, and a checklist to bring structure to an FSBO deal.
- Cheap businesses to buy: what actually works at the small endAn honest look at cheap businesses for sale (under $50k, under $10k): when they're a job, when they're just equipment, and which small deals can work.
- Confidential information memorandum: how to read a CIM skepticallyWhat a broker's confidential information memorandum contains, what it usually leaves out, and the questions a CIM should trigger before you make an offer.
- E-2 visa businesses for sale: what to check before you buyBuying a business for an E-2 treaty investor visa: why 'E-2 ready' listings need extra scrutiny, the 'marginal enterprise' issue, and verifying earnings.
- Evaluating a small business for sale: a one-hour screenA one-hour screen for a small business for sale: listing math, owner dependence, concentration, trend, lease and red flags, with a scorecard.
- How to find a business to buyHow to find a business to buy: brokers, listing sites, direct outreach, CPAs and attorneys, industry networks, and how to use each.
- Seller financed businesses for sale: good deal or warning sign?Why some listings offer seller or owner financing, what typical terms look like, how they fit SBA rules, and the red flags behind generous terms.
- Working with a business broker when you're the buyerHow business brokers work from the buyer's side: who they represent, how to become a buyer they call first, what they won't tell you, and who pays the fee.
Earnings, SDE and add-backs 11
How to tell whether the profit a seller shows you is real. Topic page
- Add-backs examples: 30 common ones, rated by how well they hold upThirty common add-backs examples in small business sales, rated solid, shaky or unsupported, with the evidence that would change each rating.
- Add-backs to EBITDA: how adjusted EBITDA is built and testedHow add-backs turn EBITDA into adjusted EBITDA, which adjustments hold up in a QoE, and why run-rate and pro forma add-backs deserve suspicion.
- Add-backs: which ones hold up when you buy a businessWhat business add-backs are, which ones survive a lender's review, the evidence each needs, and how to rate them solid, shaky or unsupported.
- Buying a cash business: what to do when the seller says the real profit is higherBuying a cash-heavy business: why you shouldn't pay for unreported income, why lenders won't count it, and how to test cash revenue with other evidence.
- How to read a profit and loss statement when you're buying a businessA plain-English walkthrough of a profit and loss statement for business buyers: revenue, COGS, gross margin, expenses, and what to compare year to year.
- Owner salary add-back: getting owner pay right in SDEHow to treat the owner's salary when calculating SDE: adding back one owner, payroll taxes and benefits, two working owners, and replacement salaries.
- Proof of cash: checking that a seller's revenue really reached the bankA proof of cash reconciles bank deposits to the revenue a seller reports, month by month. How to do one, reconciling items, and red flags.
- Quality of earnings report for a small business acquisition: do you need one?When a buyer needs a quality of earnings report for a small business acquisition, what it covers, SBA's $3M rule, and buyer-side options below that.
- SDE vs EBITDA: what's the difference when you buy a business?SDE vs EBITDA: how they differ, when each is used to price a business, how to convert one to the other, and which one lenders use for coverage.
- Seller's discretionary earnings (SDE): what it means and how buyers test itWhat seller's discretionary earnings means, how SDE is calculated from a tax return, which add-backs belong in it, and how lenders and buyers test it.
- Tax returns vs profit and loss: why they differ and which to trustWhy a seller's P&L doesn't match the tax return, cash vs accrual differences, which one lenders rely on, and how to reconcile the two before you buy.
Financing the purchase 10
SBA 7(a) rules, equity, seller notes and what 'no money down' really means. Topic page
- How to buy a business with no money down: what's actually possibleCan you buy a business with no money down? What's really possible: SBA's 10% minimum, seller notes, investors, and what the zero-down pitches leave out.
- SBA 7(a) loans for buying a business: the rules a buyer needs to knowHow SBA 7(a) business acquisition loans work under SOP 50 10 8.1: equity, valuation, QoE at $3M, DSCR, seller notes, earnouts and transition limits.
- Debt service coverage ratio (DSCR) for buying a businessDebt service coverage ratio for business acquisitions: how DSCR is calculated, SBA minimums by deal type, historical vs adjusted DSC, and a worked example.
- How to buy a laundromat with no money down: what's realisticCan you buy a laundromat with no money down? SBA equity rules, seller notes, equipment financing and the arithmetic that decides if it works.
- Personal guarantee on an SBA loan: what you're signingWho must personally guarantee an SBA loan to buy a business, what an unlimited guaranty means, spouse rules, and when lenders take a lien on your home.
- Rollover for business startups (ROBS): using retirement money to buy a businessHow a rollover for business startups (ROBS) uses retirement money to buy a business, what the IRS has found about ROBS plans, and the risks to weigh.
- SBA business valuation: what the lender's appraisal means for your dealSBA business valuation rules under SOP 50 10 8.1: who can do it, who orders it, what it must include, and what happens if the price exceeds it.
- SBA equity injection: how much you need to put in, and from whereHow much equity the SBA requires to buy a business, what counts as equity, the limit on seller notes and investors, and how to document your funds.
- SOP 50 10 8.1: what the new SBA rules mean if you're buying a businessWhat changed for business acquisitions on October 1, 2026 under SBA SOP 50 10 8.1, and what each change means for a buyer's cash, price and timeline.
- Small business acquisition financing: how a deal's money fits togetherHow small business acquisition financing is structured: equity, senior debt and seller notes, how lenders size the loan, and a worked sources-and-uses.
How valuation works 8
General education on multiples and methods. We never value your deal. Topic page
- Small business valuation: how it works, in plain EnglishHow small business valuation works: earnings multiples, the income, market and asset approaches, what moves a multiple, and who does formal valuations.
- EBITDA multiple valuation: how it works, with the arithmeticHow EBITDA multiple valuation works: enterprise value vs equity value, debt-free cash-free deals, worked arithmetic, and when small businesses use EBITDA.
- How to value a business you want to buy: the buyer's lensHow buyers think about value: verified earnings, what you can afford to pay given financing, the return on your cash, and when to get a formal valuation.
- Multiple of revenue valuation: when it works and when it misleadsWhen businesses are valued on a multiple of revenue, why it suits recurring-revenue businesses, and why it misleads buyers of low-margin businesses.
- SDE multiplier: what moves the multiple on a small businessHow an SDE multiple works, the factors that push it up or down, a scorecard to judge a listing, and why verified SDE matters most.
- Small business valuation methods: what each one is good forThe main small business valuation methods (SDE and EBITDA multiples, capitalization of earnings, DCF, asset-based, rules of thumb) and when each fits.
- Valuation multiples by industry: what actually moves themWhy business valuation multiples differ by industry, what matters more than industry, where reliable comparable data comes from, and the factors by sector.
- Valuing goodwill in a small business: what you're really paying forWhat goodwill is in a small business sale, personal vs enterprise goodwill, why personal goodwill can walk out the door, and how buyers protect it.
Due diligence and red flags 8
Checklists, documents to request and the warning signs that matter. Topic page
- Due diligence checklist for buying a businessA due diligence checklist for buying a small business: financial, tax, legal, lease, employees, customers, operations and licences, with what to look for.
- Customer concentration risk when buying a businessHow to measure customer concentration (top 1, top 5, top 10 share), why lenders and QoE reviewers flag it, and how to protect yourself in the deal.
- Due diligence questions to ask when buying a businessWritten due diligence questions to send a business seller, grouped by finances, customers, staff, operations and legal, with why each question matters.
- Employees when buying a business: what to checkEmployees when buying a business: payroll records, contractor vs employee classification, accrued PTO, key staff retention, I-9s and notice rules.
- Lease assignment when buying a businessLease assignment when buying a business: assignment vs new lease, landlord consent, personal guarantees, remaining term vs SBA loan term, rent changes.
- Legal due diligence for a small business acquisitionLegal due diligence when buying a small business: entity good standing, litigation, liens, contracts, IP, permits, employment and environmental checks.
- Red flags when buying a business, and what to do about eachRed flags when buying a business, grouped by severity: refusing records, deposits below revenue, unsupported add-backs, concentration, lease problems.
- Transferring business licenses when you buy a businessWhich business licences and permits transfer when you buy a business and which don't: personal, location and entity licences, and how to plan timing.
Deal terms, closing and handover 13
LOIs, asset vs stock, working capital, closing and the first 90 days. Topic page
- Asset purchase agreement: the sections a small business buyer should understandThe sections of an asset purchase agreement in plain English: assets, liabilities, price adjustments, reps and warranties, indemnity, closing conditions.
- Asset purchase vs stock purchase: which is better for a buyer?Asset purchase vs stock purchase when buying a small business: liabilities, taxes, contracts, licences and consents compared, and when each makes sense.
- Assuming debt when buying a businessShould you assume a seller's debt when buying a business? Payoffs at closing vs assumption, lender consent, equipment leases, and how debt affects price.
- Buying a business with a partner: roles, equity and the agreementHow to buy a business with a partner: splitting roles and equity, the operating agreement, SBA guarantee rules for 20% owners, and handling deadlock.
- Earnouts when buying a small business: how they work and when you can't use oneHow an earnout works when buying a business, why earnouts cause disputes, and why SBA 7(a) acquisition loans prohibit seller earnouts since Oct 2026.
- How to buy an LLC: membership interests or assets?How to buy an existing LLC: buying membership interests vs buying its assets, what comes with the entity, operating agreement consents and filings.
- Letter of intent to buy a business: what to put in itWhat goes in a letter of intent to buy a business: price, structure, diligence, exclusivity, financing and valuation contingencies, with a plain template.
- Non-compete when buying a business: what to ask the seller to signWhy a buyer needs the seller to sign a non-compete, how scope, length and geography are set, and why sale-of-business non-competes are treated differently.
- Representations and warranties in a business purchase: which ones matterWhich seller representations and warranties matter most when you buy a small business, how long they last, and how indemnity and holdbacks back them up.
- Seller transition period: getting the knowledge out of the seller's headHow long sellers stay after a business sale, what a good transition plan covers, how to pay for it, and the SBA's 24-month consulting limit.
- The closing process for buying a business, step by stepWhat happens at closing when you buy a business: final documents, lender conditions, funds flow, lease and licences, accounts and keys, in order.
- The first 90 days after buying a businessWhat to do in the first 90 days after buying a business: money and controls first, then people and customers, and which changes to hold off on.
- Working capital peg: how buyers protect themselves at closingWhat a working capital peg is, why small business buyers get hurt by working capital, how a peg and true-up work, with a worked example.
Franchise resales 3
Buying an existing franchise unit: FDD, transfer and the unit's own numbers. Topic page
- Franchise due diligence checklist and questions to askA franchise due diligence checklist: FDD items to review, questions for the franchisor and franchisees, and checks for a resale unit's own numbers.
- Franchise resales: how to buy an existing franchise unitHow to buy an existing franchise unit: its own P&L vs system averages, franchisor approval, transfer fees, new agreement terms, remodels.
- How to buy a franchise: a buyer's processHow to buy a franchise: read the FDD, use Item 19 carefully, call franchisees, check territory and financing. No best-of lists.
Industry guides: what to check in the numbers 58
How to buy a laundromat, car wash, HVAC company, dental practice and more. Topic page
- Buying a NEMT business: what to check before you buyBuying a non-emergency medical transportation business: broker contracts and Medicaid dependence, credentialing, vehicle requirements, trip logs.
- Buying a bakery: what to check in the numbersBuying a bakery: retail vs wholesale accounts, early-morning labor, ingredient costs, owner-baker skill dependence, equipment, recipes and health permits.
- Buying a bookkeeping business: what to check in the numbersHow to buy a bookkeeping business: verify recurring clients, tenure and pricing, staff vs contractors, software access and the handover.
- Buying a coffee shop: what to check before you buyBuying a coffee shop or cafe: ticket count and average ticket by daypart, cup and milk purchases as a sales check, labor, lease, espresso equipment.
- Buying a commercial cleaning business: what to check in the contractsBuying a commercial cleaning or janitorial business: contracts and cancellation terms, concentration, night labor, bonding and contract margins.
- Buying a construction business: what to check in the numbersBuying a construction company: WIP schedule and over/under billings, backlog, bonding tied to the owner, licences, retainage, change orders and key staff.
- Buying a courier or delivery business: what to checkBuying a courier or delivery business: shipper contracts (pharmacy, lab, legal), driver classification, vehicle costs, route density and concentration.
- Buying a distribution business: what to check in the numbersBuying a wholesale distributor: supplier line agreements and territories, inventory turns, gross margin, receivables, warehouse costs and working capital.
- Buying a dog boarding or kennel business: what to checkBuying a dog boarding or kennel business: occupancy and holiday peaks, daycare memberships, zoning and permits, real estate, 24/7 staffing and incidents.
- Buying a dog grooming business: what to checkBuying a dog grooming business: groomer retention and client loyalty, the appointment book, salon vs mobile vans, add-on services, safety and reviews.
- Buying a gym: what to check in the membership numbersBuying a gym or fitness studio: active vs billed members, churn, EFT drafts, prepaid memberships as liabilities, equipment leases and lease.
- Buying a hair salon: what to check before you buyBuying a hair salon: commission vs booth rental models, stylist retention and client ownership, retail sales, licences, lease and booking data.
- Buying a landscaping business: what to check in the numbersBuying a landscaping business: maintenance contracts vs installs, commercial renewals, seasonal labor and H-2B reliance, equipment, snow revenue.
- Buying a liquor store: what to check before you buyBuying a liquor store: licence transfer under state rules, inventory valuation at cost, margins by category, shrink, lottery and tobacco income, and lease.
- Buying a manufacturing business: what to check in the numbersBuying a small manufacturer: customer concentration, margin by product, equipment condition and capex, inventory valuation, key machinists and quality.
- Buying a pest control business: what to check in the numbersBuying a pest control business: recurring service contracts, termite bonds and warranty liabilities, licensed applicators, route density and chemicals.
- Buying a pizza business: what to check in the numbersBuying a pizza shop: delivery vs carryout mix, third-party app fees, cheese and labor costs, ovens, drivers, franchise vs independent, and POS checks.
- Buying a pool service business: what to check on the routeBuying a pool service business or route: price per account, churn, chemical costs, repair revenue, seasonality and how accounts actually transfer.
- Buying a residential cleaning business: what to checkBuying a residential cleaning business: recurring clients, cleaner turnover, contractor misclassification risk, booking platforms, pricing and reviews.
- Buying a trucking company: what to check in the numbersBuying a trucking company: operating authority, safety record, fleet age, drivers vs owner-operators, customer and broker concentration, insurance.
- Buying a vending machine route: what to check firstHow to buy a vending route: location agreements, host commissions, machine age and card readers, cash collection records, and route scams to avoid.
- Buying an ATM business: what to check on the routeBuying an ATM business or route: surcharge and interchange revenue per transaction, location agreements, processor contracts, vault cash and loading costs.
- Buying an Amazon FBA business: what to check before you buyBuying an Amazon FBA business: verify sales in Seller Central, account health, ASIN concentration, ad dependence, inventory and suppliers.
- Buying an HVAC business: what to check in the numbersBuying an HVAC business: service agreements vs installs, the licence qualifier, technician retention, seasonality, warranty callbacks and fleet costs.
- Buying an IT business or MSP: what to check in the numbersHow to buy an IT services business or MSP: verify recurring contracts, per-seat pricing, tool costs, tech retention and security risk.
- Buying an accounting practice: what to check in the numbersHow to buy an accounting or CPA practice: check fees and retention by client, tax-season concentration, firm ownership rules, staff, and the transition.
- Buying an auto repair shop: what to check in the numbersBuying an auto repair shop: car count, average repair order, technician productivity, parts margin, fleet accounts, environmental issues and equipment.
- Buying an ecommerce business: what to check in the numbersBuying an ecommerce or Shopify store: revenue by channel, customer acquisition cost and repeat rate, ad account access, inventory, suppliers, refunds.
- Buying an electrical contracting business: what to checkBuying an electrical contractor: the master electrician or qualifier, service vs contract work, WIP and backlog, bonding, GC concentration and safety.
- Buying an insurance agency: what to check in the book of businessBuying an insurance agency: commission revenue by carrier and line, new vs renewal, retention, carrier appointments, producer agreements, contingent pay.
- Day care for sale: how to check a daycare business before you buyBuying a daycare: licensed capacity vs enrollment, staff ratios and qualifications, subsidy dependence, licence transfer, waitlist and the building.
- How to buy a FedEx route (and check the numbers first)How to buy FedEx Ground routes: the contractor agreement and FedEx approval, settlement statements as revenue proof, trucks, drivers, and contract risk.
- How to buy a SaaS business (and check the numbers before you do)How to buy a small SaaS business: verify MRR from billing data, measure churn by cohort, review the code and founder dependence.
- How to buy a bar (and check the numbers first)How to buy a bar: liquor licence transfer under state rules, pour cost and inventory checks, cash handling and theft, security, dram shop insurance, lease.
- How to buy a car wash (and check the numbers before you do)How to buy a car wash: verify car counts and memberships, test sales against water and chemical use, judge equipment and land, and spot weak add-backs.
- How to buy a convenience store: what to check in the numbersHow to buy a convenience store without fuel: sales by category, tobacco and lottery at thin margins, licences, shrink and cash, inventory count and lease.
- How to buy a dental practice (and check the numbers first)How to buy a dental practice: production vs collections, payer mix, hygiene recall, active patients, associates, equipment and transition.
- How to buy a dry cleaning business: what to checkHow to buy a dry cleaner: plant vs drop store, solvent and perc environmental history, Phase I, equipment, pickup routes, revenue trend and cash sales.
- How to buy a fast food restaurantHow to buy a fast food restaurant, usually a franchise resale: franchisor approval, royalties and ad fund, remodel requirements, drive-thru data and labor.
- How to buy a gas station (and what to check underground)How to buy a gas station: fuel margin per gallon vs inside sales, branded supply agreements, underground storage tanks, environmental checks.
- How to buy a home health agency: what to checkHow to buy a home health or home care agency: Medicare-certified vs non-medical, the CMS 36-month rule, state licensing, payer mix and caregiver turnover.
- How to buy a hotel franchiseHow to buy a franchised hotel: franchise transfer or new agreement, property improvement plans, brand fees, management contracts, STR data and financing.
- How to buy a laundromat (and check the numbers before you do)How to buy a laundromat without overpaying: test revenue against water bills, read the lease first, price the machines and spot weak add-backs.
- How to buy a marketing agency (and check the numbers first)How to buy a marketing agency: retainers vs projects, client concentration and tenure, founder-led sales, contractors and margins.
- How to buy a med spa (and what's different from a day spa)How to buy a med spa: state medical ownership rules, the medical director, injector retention, prepaid packages as liabilities, products.
- How to buy a motel business: what to check in the numbersHow to buy a motel: occupancy, ADR and RevPAR from the property system, OTA commissions, long-stay guests, deferred maintenance, flags and PIPs.
- How to buy a nail salon businessHow to buy a nail salon: cash and tips, technician pay and classification, licences, ventilation and chemical safety, reviews, lease and booking data.
- How to buy a physical therapy practice: what to checkHow to buy a PT clinic: payer mix, visits per therapist, collections per visit, Medicare change-of-ownership enrollment, credentialing delays and staffing.
- How to buy a plumbing business (and check the numbers first)How to buy a plumbing business: service vs new construction, the master plumber licence, call volume and average ticket, techs and callbacks.
- How to buy a restaurant (and check the numbers before you do)How to buy a restaurant: verify sales from POS and processor data, prime cost, cash, liquor licence, lease, health inspections and owner-chef dependence.
- How to buy a roofing company (and test whether the revenue lasts)How to buy a roofing company: storm and insurance work volatility, lead sources, subcontracted crews, warranty liabilities, licensing and workers' comp.
- How to buy a self storage facility: what to checkHow to buy a self storage facility: physical vs economic occupancy, rent rolls, delinquency and lien sales, expenses and tax reassessment.
- How to buy a veterinary practice (and check the numbers first)How to buy a vet clinic: revenue per doctor, active clients, pharmacy and inventory, DEA registration, state ownership rules, staff and equipment.
- How to buy an RV park or campground: what to checkHow to buy an RV park or campground: long-term vs transient sites, seasonality, utilities and submetering, well and septic permits, zoning and real estate.
- How to buy an existing UPS Store (franchise resale)How to buy an existing shipping and print franchise like a UPS Store: franchisor approval, FDD, mailbox and print revenue, shipping margins and lease.
- How to buy an independent pharmacy: what to checkHow to buy an independent pharmacy: script volume and margin, PBM contracts and clawbacks, DEA registration, permits, inventory, front end.
- How to buy an online business (content sites, newsletters, digital products)How to buy an online business such as a content site, newsletter or digital product: traffic concentration, revenue checks, asset transfer.
- Lawn care businesses for sale: how to check a mowing routeBuying a lawn care or mowing business: route density, spring churn, price per stop, owner-operator dependence, equipment age and customer transfer.