How to Prepare to Buy a Business

For many aspiring entrepreneurs, buying a business represents a faster, safer, and more strategic path to business ownership compared to starting from scratch. But preparation is critical. The more groundwork you lay before searching for a business, the better your decisions—and outcomes—will be.

This article outlines key areas to focus on before you begin making inquiries or reviewing listings.

1. Clarify Your Objectives

Before you look at what’s for sale, take the time to define what you want from ownership:

• Are you buying a job (i.e., replacing W-2 income)?

• Are you seeking a scalable asset?

• Are you acquiring to bolt on to an existing business?

  
  

Different motivations point to very different types of businesses—and transaction structures. You don't have to have all the answers upfront, but clarity here will save you from spinning your wheels later.

2. Assess Your Financial Picture

Buying a business often involves a combination of:

• Cash injection (typically 10%–30% of purchase price)

• Financing (SBA 7(a), seller financing, private capital, etc.)

• Working capital reserves post-acquisition

  
  

It’s helpful to prepare a basic personal financial statement and credit check early. These will be required to submit offers or get financing. Don’t over-extend, but do be realistic—most solid deals require skin in the game.

3. Know the Types of Businesses That Fit You

It’s common to browse businesses across different industries, especially early on. However, buyers tend to have better experiences when they:

• Stick to industries they understand (or can learn quickly)

• Choose businesses that match their preferred involvement level (owner-operator vs. absentee)

• Consider the licensing, staffing, or technical requirements upfront

  
  

You don’t need to know exactly what you're looking for, but it helps to rule out what doesn’t make sense for you.

4. Understand the Purchase Process

Buying a business is not the same as buying real estate or a car. Key stages include:

• Confidential inquiry and NDA

• Reviewing financials and summary packages

• Buyer-seller introduction (if mutually qualified)

• Offer or LOI submission

• Due diligence

• Financing approval

• Lease assignment/approval (if applicable)

• Final purchase agreement and closing

  
  

Understanding this sequence helps you know where you're headed—and where to ask questions.

5. Prepare Your Support Team

While you don’t need to hire everyone on Day 1, it’s smart to start identifying the professionals you'll eventually need:

• A small business-friendly CPA to help review tax returns, P&Ls, and cash flow

• A transaction attorney to assist with contracts and lease review

• A business broker to help source, screen, and structure viable deals

• An SBA lender or capital partner if you're planning to finance the acquisition

  
  

Some brokers—myself included—maintain a network of professionals who specialize in small business transactions. The key is to surround yourself with advisors who understand privately held, main street, or lower middle market deals—not just large corporate M&A.

6. Develop a Timeline and Criteria

Many buyers start browsing with no real plan, and months later, they’re still looking. Avoid that by creating a rough plan:

• What’s your acquisition timeframe?

• How much time per week can you commit?

• What are your must-haves vs. deal breakers?

  
  

Having a framework helps you evaluate opportunities more objectively—and avoid decision fatigue.

In Summary

Preparing to buy a business is just as important as the search itself. Set your expectations, know your numbers, understand the process, and line up your team. With preparation, you’ll be better positioned to move confidently when the right opportunity shows up.

Need guidance with this process?I work with qualified buyers in Georgia and beyond to help evaluate, negotiate, and close small business acquisitions—from Main Street to M&A.

Learn more about the buyer advisory services I offer or reach out for a consultation.