How Do I Buy A Small Business -

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. Analyze the Confidential Information Memorandum (CIM)

This is a non-binding document outlining your proposed price, deal structure (cash vs. debt), and the timeline for due diligence. 4. Due Diligence deal structure (cash vs. debt)