How Do I Buy A Small Business May 2026

You will need specialized help to avoid costly mistakes. This team typically includes a business attorney , a CPA or accountant , and potentially a business broker . 2. Sourcing and Initial Screening

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) how do i buy a small business

Choose an industry that aligns with your professional background and passions. You will need specialized help to avoid costly mistakes

Use online marketplaces like BizBuySell or DealStream , or work with brokers who have access to unlisted deals. Valuation and the Letter of Intent (LOI) Choose

Small businesses are commonly valued at 2x to 4x their Seller’s Discretionary Earnings (SDE) or EBITDA.

Once you know what you want, begin searching for opportunities.

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