Interested in buying a company and unsure how to source good deals for small businesses between $1-20MM in revenue. How do you find companies like this for sale?

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Most industries have brokers. So there are accounting firm brokers, restaurant franchise brokers, etc. These are generally specialized by industry not just a superstore of small businesses.

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Appreciate this

helpful

Microacquire

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I’m going to try to be nice and take this at face value because I was young and naive once.

People who do this for a living (eg PE firms) specialize much more narrowly. 1-20M revenue could include everything from a guy who owns a couple pizza shops to a software company with hundreds of employees. A transaction could be anywhere from around $1M to low 9 figures. How you source, diligence, and structure a deal will be completely different depending on the size, industry, and so on.

The first question I’d answer is, how much capital do you really have ready access to? You are not going to find a $10m revenue company and just walk into a bank and get a mortgage for $40m as an ordinary civilian. Even if you’re trying to buy the local laundromat or taco shop the bank is likely to qualify you personally on income/assets and require a guarantee.

If you actually won the lottery and have a million burning a hole in your pocket, the best thing you could do is put that in VTI and get back to your day job. If you have already done that, then the next question is, what are you an expert in? If the answer is roughly “nothing” then your first step is to learn about the kind of business you want to buy. When I was in HS I worked at a pizza shop whose owner was in his 20s. He did 4 in the army, came home, got a job in a small pizza shop, and after a couple years made a deal with the owner to buy him out. At the small end of the pond this is probably the most accessible way to get into ownership.

FWIW I have twenty years of experience as an entrepreneur and business owner and the idea of buying somebody else’s business scares the $&@! out of me. Think about what goes into hiring and developing one employee, or building one customer relationship. Buying a business is getting dozens and hundreds of those all at once. There’s a lot that can go wrong in there if you don’t know how to diligence it and we haven’t even gotten into the really arcane but important details like financial and legal diligence.

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I work in diligence, plenty of experience there. Just inquiring about how people are sourcing deals because every company I see listed for sale is a pile of shit.

Maybe I need to be involved in networking groups to get access to the companies worth buying - that’s what i’m asking.

Access to capital is not an issue, and I’ve already got $500k in VTI/VSTAX so I think we are all set on that front. Appreciate your insight & honesty.

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Bizbuysell, bizquest are a few other options and will at least give you an idea of businesses in your geo that are for sale. Similar to RE the good stuff is usually off market, but there are some diamonds in the rough.Twitter is another great resource, #SMBtwit for learning the ETA ( entrepreneurship through acquisition) space. Some good podcasts: acquisition’s anonymous, acquiring minds, owned and operated.

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Or find something you like and offer to buy

Edit: sorry I answered the wrong question

Profit and loss statement. All businesses should have these

Next, figure out alllll of the costs, from electricity to trash removal to payroll

Franchise?

There are a lot in Japan rn

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