A complete step-by-step guide for buying your first business in the $100K–$1M range. 6 phases, 26 steps, everything in order.
Your budget = deployable capital × 5 (SBA lets you put 10% down on a 90% loan). If you have $50K in savings and $30K is deployable, you can buy up to $300K with SBA. Run the math before you fall in love with a listing.
Lenders require 1.25x debt service coverage. That means the business must generate $1.25 for every $1.00 of loan payment. If it doesn't, you won't get the loan regardless of your credit score.
Write down: business types you'll look at, types you won't, minimum profit, max asking price, remote vs. local, owner-operated vs. staff-run. Be specific. Vague criteria lead to distracted searching and time wasted on bad deals.
A pre-qualification letter from an SBA lender signals to sellers you're serious and can close. Many preferred lender program (PLP) lenders pre-qualify in 48 hours. Use this as a competitive edge when submitting LOIs.
Every weekday at 7am, get the top 5 AI-scored deals from Empire Flippers, Flippa, Acquire.com, and Quiet Light. Each deal pre-analyzed before you even open your laptop.
Empire Flippers (revenue-verified, curated), Quiet Light (premium $500K+), Flippa (high volume, lower verification), Acquire.com (SaaS focused), BizBuySell (local/main street).
70% of businesses are sold before they're listed. Use direct outreach to owners of businesses in your niche. A short, direct email beats cold calls every time.
Paste the deal metrics — asking price, monthly profit, age, traffic source, niche. Get an AI score 0–100, revenue quality rating, multiple fairness check, and a clear verdict. Takes 30 seconds.
Content sites: 30–40x monthly profit. SaaS: 3–6x ARR. Ecommerce/FBA: 2.5–4x SDE. Service businesses: 2–3x SDE. Any listing above these ranges needs a clear reason — growth trajectory, strategic value, or proprietary tech.
Request the last 3 years of P&Ls and tax returns. Cross-reference top-line revenue against payment processor statements (Stripe, PayPal). Revenue that doesn't match is a deal-killer — pull out immediately.
A professional LOI with real legal language signals you're serious. Sellers accept LOIs from buyers who look like they can actually close — not from someone who emailed "I'm interested, what's your best price?"
If the deal analyzer shows fair value, offer at ask or slightly below with a strong cover letter. If it's overpriced by 10–20%, offer with data: "Based on current multiples for this type of business, I'm proposing $X." Back it up, don't just lowball.
Your LOI should include a 30-day exclusive due diligence period. Without it, the seller can keep showing the business and you waste your due diligence effort if they accept another offer while you're working.
Include 60–90 days of seller training in the LOI. This protects you from key-man risk and keeps the seller incentivized to transition cleanly. Standard on all SBA deals.
Don't accept screenshots. Ask for read-only access to Stripe, PayPal, Shopify, or Google Analytics. Revenue that checks out on original sources is real. Revenue that only exists in a spreadsheet is not.
If more than 20% of revenue comes from one customer, that's a risk you must price in or walk away. Losing one customer should not threaten business survival.
Legal history, IP ownership, team retention, tech dependencies, vendor contracts, key-man risk, regulatory exposure — systematically reviewed.
Start SBA paperwork the day you get exclusivity — don't wait. 42-item package, organized for lenders. Get a decision while you're still in due diligence. Parallel-path your close.
For any deal over $300K, spend $2,500–$5,000 on a QoE audit. An accountant independently verifies revenue, profit, and add-backs. This is cheap insurance — many buyers have avoided $200K mistakes here.
Use an M&A attorney for the APA — not a general practice lawyer. Budget $2,000–$5,000. The APA defines exactly what you're buying, what's excluded, representations and warranties, and post-close adjustments.
SBA closing: wire down payment to escrow → lender funds → seller signs over domain, code, customer list, social accounts, trademarks. Get everything in writing. Change passwords the day of close.
Transfer: domain registrar, hosting, email, payment processor, supplier accounts, ad accounts, social accounts. Send a "new ownership" announcement to customers. Schedule week-1 calls with key team or contractor.
The roadmap is the strategy. Deal Alert AI is the unfair advantage — AI-scored deals at 7am so you're always the first offer in.
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