What Kind of SMB am I Looking to Buy

Adam Hoeksema
January 8, 2024
2 min

The week after I graduated from undergrad in June of 2010 I started my first business and now 13 years later I have started 5 businesses in total and probably another 5 side projects that never become a true business. 

But I have never really considered buying a business.  And I am not sure why… 

As I was falling down the rabbit hole, learning about all of the small businesses that will be available for sale in the coming years, my mind went directly to “what business could I start that would support this trend?”

After reading every newsletter / blog post from my friend Mike who is looking to buy a business it dawned on me that maybe I could actually buy a business someday.  

P.S. you have got to follow Mike’s newsletter (Mike Buys a Biz) about his journey to buy a business, it’s really great and I learned a ton!

I think I had a bunch of assumptions about buying a business that are wrong.  I assumed:

  1. Any business that I might want to buy, the owner won’t want to sell.
  2. Any business that I might want to buy, I can’t afford. 
  3. Any business that I might want to buy, would be a bunch of extra work and I like my current lifestyle. 
  4. I would just be wasting my time looking for a business to buy that I will never find.

But after thinking this through some more and reading about Mike’s journey I realized that:

  1. Maybe I could find a business owner who wants to sell their business to me, especially if I am willing to build a relationship with that business owner over a period of time. 
  2. If I could actually befriend a seller such that they wanted to sell to me, maybe they would be willing to negotiate on the structure of the deal such that I can afford it. 
  3. Just because most small businesses I know would be a bunch of extra work, doesn’t mean that every small business out there would ruin my lifestyle or work schedule. 
  4. I was concerned about wasting my time looking for a business to buy, but realized if I share about my learnings with others, maybe that would be valuable in and of itself, so if I never find a great business to buy, I won’t have regrets. 

So with those concerns addressed I came up with the following characteristics of a business that I am hoping to buy:

  1. The business should serve small businesses.  All of my experiences and interests have always been around small business and entrepreneurship.  I am looking for a business that could fit well with my experiences around small business finance, small business funding from investors or lenders, or accounting. 
  2. The business should be able to be operated remotely.  I am not interested in buying a business enough that I would allow it to force me to move.  I work from home and really like it that way, so I need to be able to operate the business remotely.  Ideally, the business is already operated remotely so that I don’t have the risk to the business of transitioning ownership and transitioning to a remote workplace environment all at once. 
  3. The business should sell digital products, software or services that can be delivered digitally.  I have no interest in traveling day to day to sell or deliver our services.  If I can’t do everything from my laptop anywhere in the world, then it isn’t the right business for me.
  4. The business should be valued at $1 million or less.  My theory, and why I started SMBuyer, is that there are unique opportunities to buy businesses for less than $1 million when approached the right way.  I also don’t want to take such a big swing on my first business acquisition that it could completely ruin everything I have built so far.  I don’t want to start out by buying a business that is 10x bigger than anything I have ever operated.  That seems like a recipe for failure.  

Given these parameters here are some initial ideas on the types of businesses that I might be interested in buying:

  1. Business Valuation Service
  2. Help people buy a business with a ROBS or Self Directed IRA
  3. Marketplace to buy an SMB
  4. Business Brokerage
  5. Due Diligence service provider
  6. Marketplace to find service providers
  7. Quality of Earnings Report Service
  8. EB5 Visa Business Planning / Projections
  9. Small Business Loan Broker
  10. SaaS tool that serves a specific SMB niche

Now how to go about actually finding businesses that meet my criteria is the next problem to solve.  Your ideas are certainly welcome, let me know at adam@smbuyer.com!

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