Buyers
How to buy a business in the United States
From acquisition thesis to closing: how buyers find businesses for sale, price them on SDE or EBITDA, finance them, and verify what they are buying.
The acquisition process, step by step
- Step 1
Write an acquisition thesis
Decide industry, revenue and earnings range, geography, your operating role and the return you need. Buyers who can state this in two sentences move faster than buyers who browse.
- Step 2
Search listed and off-market opportunities
Listed businesses for sale are the visible market. Off-market acquisition opportunities are reached by identifying companies that fit the thesis and approaching the owner directly.
- Step 3
Sign the NDA and review the CIM
Confidentiality first, then the confidential information memorandum, recast financials, customer profile, staffing and lease terms.
- Step 4
Price the business
Apply an SDE or adjusted EBITDA multiple appropriate to the size and industry, then adjust for customer concentration, owner dependence and capital expenditure needs.
- Step 5
Arrange financing early
Talk to an acquisition lender before the letter of intent. The structure a lender will support shapes the offer you can credibly make.
- Step 6
Submit a letter of intent
Price, structure, treatment of cash, debt and working capital, financing plan, timetable and exclusivity.
- Step 7
Run due diligence
Quality of earnings, tax filings, contracts, employment, licenses, litigation, insurance, systems and — where included — property title and condition.
- Step 8
Close and transition
Purchase agreement, funding, working capital adjustment, and an agreed handover of customers, staff and supplier relationships.
Who competes for the same deals
Individual owner-operator
Buying a job and an asset. Usually SBA-supported, focused on stable cash flow and a workable transition.
Search fund
An operator backed by investors, acquiring one company to run. Values clean records and a defensible market position.
Private equity platform
Acquiring a platform or making add-on acquisitions in a fragmented sector. Prices on adjusted EBITDA and management depth.
Strategic acquirer
An operating company adding capacity, customers, geography or product range, and often able to justify a higher price.
Financing an acquisition
Most lower-middle-market purchases combine sources: buyer equity, bank or SBA-guaranteed debt, a seller note, an earnout and, where an investor is involved, outside equity. Where owner-occupied commercial real estate is part of the transaction, the property is usually financed on its own terms alongside the business.
Search by state
Buyer pools, lease practice and licensing differ by state. Each market page carries listings and the local points that affect an acquisition.
Businesses for sale in TexasBusinesses for sale in FloridaBusinesses for sale in CaliforniaBusinesses for sale in New YorkBusinesses for sale in GeorgiaBusinesses for sale in North CarolinaBusinesses for sale in ArizonaBusinesses for sale in TennesseeBusinesses for sale in ColoradoBusinesses for sale in Illinois
Buying a business: common questions
General US market practice. Financing eligibility is determined by the lender and, for SBA-guaranteed loans, by SBA rules.
How do I buy a business?
Define an acquisition thesis covering industry, size, geography and your operating role, review listings and off-market opportunities, sign a non-disclosure agreement to receive detail, review the information memorandum and financials, submit a letter of intent, complete due diligence with your accountant and attorney alongside financing, and close on a purchase agreement.
How do buyers finance business acquisitions?
Common sources are buyer equity, bank or SBA-guaranteed debt, a seller note, an earnout tied to future performance, and equity from private equity or search fund investors. Most lower-middle-market transactions combine several of these rather than relying on a single source.
Can SBA financing be used to buy a business?
SBA-guaranteed loan programs are commonly used by US buyers to acquire small businesses, subject to lender approval and SBA eligibility rules covering the business, the buyer and the transaction structure. Eligibility is determined by the lender and the SBA, not by a marketplace listing, so confirm it early with a lender experienced in acquisition lending.
What is a strategic buyer?
A strategic buyer is an operating company acquiring another business for commercial reasons such as market entry, added capacity, customer access or product range. Strategic buyers can justify a higher price where the combination creates savings or revenue that a financial buyer would not obtain.
What is a financial buyer?
A financial buyer — such as a private equity fund, family office, search fund or individual investor — acquires a business primarily for its cash flow and return profile, and prices the deal on earnings, risk and financing capacity rather than on synergies.
What is an add-on or bolt-on acquisition?
An add-on, or bolt-on, is an acquisition made by an existing platform company to expand its geography, service range or capacity. Add-on buyers are often the most motivated acquirers of well-run owner-operated businesses in fragmented industries.
What is an off-market acquisition?
An off-market acquisition is the purchase of a business that is not publicly advertised for sale. Buyers reach these opportunities by identifying companies that fit an acquisition thesis and approaching the owner directly, usually before a formal sale process starts.