How To Buy A Small Business -

Buying a small business is often viewed as a less risky way to build wealth than starting a brand-new company, as you acquire a proven source of income and established systems. 1. Define Your Strategy

Once you sign a , you enter a "due diligence" period (typically 60-90 days) to verify the seller's claims. You should request:

Before making an offer, you must determine what the business is actually worth.

: If the owner is the only one who knows how to run daily operations, you are buying a "job," not a business. Look for documented processes and a strong second-in-command. Recommended Reading Buying a Business: 7 Documents to Request | CO

: For small businesses, the most common method is using a multiple of Seller’s Discretionary Earnings (SDE) —typically 2x to 4x annual profit. SDE is the net profit plus owner salary and personal perks.

: Check for "customer concentration"—if one client accounts for more than 20% of revenue , the business is high-risk if they leave.

Build a "deal pipeline" from multiple sources simultaneously: