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Message
re: Buying an Existing Business
Posted on 2/1/26 at 9:07 pm to dovehunter
Posted on 2/1/26 at 9:07 pm to dovehunter
quote:
If you need to go to an SBA loan I’d stop and figure out another way. The owner will typically finance the purchase over 3-5 years to reduce their tax burden. They’ll finance at prime or less. If you don’t have at least 30-35% of the cash to buy the business don’t buy it. I don’t think you need a broker. The banker, CPA or lawyer will be your source of prospects.
This. Be careful because SBA loans are usually there for those that can’t get a traditional loan, as they are generally not as great terms and rates. So ask yourself why you need that loan from the government if a private investor (banks) wont. Just don’t get yourself into trouble.
I can’t imagine buying a business I know nothing about. The biggest question is if the business is profitable why would they sell it for a reasonable deal. What outs would the owner/ seller have otherwise? As said just be leary of them fluffing their books. I’d also suggest having someone familiar with the business looking at the books, if at all possible.
2
Posted on 2/2/26 at 12:37 am to baldona
I’m an SBA lender, there are some truth to your comment and some not. The traditional banks are going to be aggressive in the terms/rates and they won’t allow working capital, interest reserve etc like SBA will.
Also, SBA is not going to lend you any money if you or a partner does not have direct industry experience.
Shoot me a DM if you have questions, I don’t mind helping out my fellow Tiger entrepreneurs!
Also, SBA is not going to lend you any money if you or a partner does not have direct industry experience.
Shoot me a DM if you have questions, I don’t mind helping out my fellow Tiger entrepreneurs!
Posted on 2/7/26 at 2:31 pm to baldona
Appreciate all of the responses, I have a good relationship with a local bank so a traditional loan is definitely in the cards, and preferred.
I guess my biggest issue is finding the proper broker, CPA, attorney, etc. After 10 years in consulting I just assume that everyone is lying to me and trying to screw me.
With some of the business owners I know now, their orgs would be too large for me to realistically purchase. Obviously these things live and die on the individual business in question.
I guess my biggest issue is finding the proper broker, CPA, attorney, etc. After 10 years in consulting I just assume that everyone is lying to me and trying to screw me.
With some of the business owners I know now, their orgs would be too large for me to realistically purchase. Obviously these things live and die on the individual business in question.
Posted on 2/7/26 at 9:33 pm to H2O Tiger
How much can you afford assuming you put down 30?. Bank should fund you given a 30% equity stake. If you need an SBA loan or think you do you can't afford it. You'll spend more time worrying about complying than you will working.
A good CPA will Know who's ready to sell a good business. The banker will confirm the value and you need that lawyer to keep you out of trouble.
A good CPA will Know who's ready to sell a good business. The banker will confirm the value and you need that lawyer to keep you out of trouble.
Posted on 2/7/26 at 11:03 pm to dovehunter
I've got roughly $500k that I could personally invest. Have more available, but that is the top of where I would feel comfortable.
Posted on 2/8/26 at 2:15 pm to SWINC
quote:
PM me if you want to get some advice on things to look out for
Im PMing right now.
Posted on 2/8/26 at 8:41 pm to Sunnyvale
TD has a great PM feature.
Posted on 2/26/26 at 11:34 pm to H2O Tiger
Things have been crazy around here but wanted to update the folks that have been kind enough to provide wisdom/advice in this thread.
I have a call tomorrow morning with an owner who is looking to exit that was set up by a mutual friend of ours. Based on what I know about the gross revenue, this one may be pushing the top end of my budget bit I figure it can't hurt to have the conversation.
I have a call tomorrow morning with an owner who is looking to exit that was set up by a mutual friend of ours. Based on what I know about the gross revenue, this one may be pushing the top end of my budget bit I figure it can't hurt to have the conversation.
Posted on 2/27/26 at 5:34 am to H2O Tiger
That's exciting! Hope it goes well.
I'll tell you guys: if you want to do it, go for it. I wanted to start my own biz for a long time but life kept getting in the way and now I feel like I'm too old to consider it. I know exactly what I would do, if only I could go back in time..
My BIL is 20 years younger than me and he did this. He is a CPA so maybe that helped but he turned a mildly-profitable business into a real money maker in about 6 years. Now he gets offers to sell the business at a truly obscene profit. This is the same guy who routinely loses his car keys and runs his boat out of gas on the lake at least once per year. If he can do it, you can. Hard work and good people skills go a long way.
I'll tell you guys: if you want to do it, go for it. I wanted to start my own biz for a long time but life kept getting in the way and now I feel like I'm too old to consider it. I know exactly what I would do, if only I could go back in time..
My BIL is 20 years younger than me and he did this. He is a CPA so maybe that helped but he turned a mildly-profitable business into a real money maker in about 6 years. Now he gets offers to sell the business at a truly obscene profit. This is the same guy who routinely loses his car keys and runs his boat out of gas on the lake at least once per year. If he can do it, you can. Hard work and good people skills go a long way.
Posted on 2/27/26 at 8:50 am to H2O Tiger
quote:
I have a call tomorrow morning with an owner who is looking to exit that was set up by a mutual friend of ours. Based on what I know about the gross revenue, this one may be pushing the top end of my budget bit I figure it can't hurt to have the conversation.
Can you give some details without giving away anything you don't want to? I'm mostly interested in the vaguest form of industry you're willing to share, and more interested in knowing what portion of the business valuation is assets and what portion of the business is a customer index. The service the business fills, are they larger transactional values or smaller? Are the commitments from customers shorter in time or a longer term customer commitment?
Again, whatever you're willing to share.
Posted on 2/27/26 at 8:54 am to Naked Bootleg
quote:
My BIL is 20 years younger than me and he did this. He is a CPA so maybe that helped but he turned a mildly-profitable business into a real money maker in about 6 years. Now he gets offers to sell the business at a truly obscene profit. This is the same guy who routinely loses his car keys and runs his boat out of gas on the lake at least once per year. If he can do it, you can. Hard work and good people skills go a long way.
This is funny. You see so many brainloose people managing businesses. Sometimes it seems like it's easy to make it if you just half arse have your stuff together. Not related to your BIL, but are these people too stupid to realize how stupid they are? Or am I stupid for thinking it's more difficult than it really is? The one thing that has always held me back is that I make a good to great annual salary and don't particularly have to worry about the next sell or job at hand. I haven't been able to convince myself that I could keep my "pipeline" full enough to make a business steady.
Posted on 2/27/26 at 9:49 pm to WhiskeyThrottle
quote:
Can you give some details without giving away anything you don't want to? I'm mostly interested in the vaguest form of industry you're willing to share, and more interested in knowing what portion of the business valuation is assets and what portion of the business is a customer index. The service the business fills, are they larger transactional values or smaller? Are the commitments from customers shorter in time or a longer term customer commitment?
Franchise (Fairly well-known brand, part of a larger group)
Brand is Territory Protected (Large Metro Area in Texas)
Home Services (HVAC/Plumbing/Electrical)
High Volume, Medium Margin
Potential for repeat customers.
Posted on 3/1/26 at 11:07 am to H2O Tiger
quote:
years. With the Baby Boomers entering retirement there are many businesses that are going up for sale. Has anyone had any experience in locating/vetting these types of businesses and, if so, did you work with any companies or services to assist in the process?
I personally feel like that is a target rich environment. I bought to businesses that were there for 30+ years.
You get a proven model that has survived lots of changes over time. In one instance I felt like there were lots of opportunities available that the owners hadn’t considered because they were too comfortable with what they had.
I have a business I only step into about 20 times a year because it was so established.
Posted on 3/1/26 at 1:40 pm to Motownsix
This is the goal.
Unlock the efficiencies/opportunities that the current owner hasn't and let it grow. Then go find something else.
Unlock the efficiencies/opportunities that the current owner hasn't and let it grow. Then go find something else.
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