How to buy a business: 9 steps, each checked against 49,900+ real listings

The short answer

Every number on this page comes from the Main Street Index, BigIdeasDB’s census of 84,900+ businesses-for-sale listings from 29 marketplace sources in 115 countries, 78,500+ after removing cross-site duplicates. We tested the 49,900+ listings quoted in US dollars on an owner earnings (SDE) basis. SDE, or seller’s discretionary earnings, is profit plus the owner’s own pay and perks. All prices are asking prices and all earnings are stated by the seller. None of it is what a business sold for.

The guides that rank for this search (law firms, lenders, a private equity firm) agree on the steps and give rules of thumb: 2x to 4x profit, 10% to 20% down, a 30 to 90 day handover. We kept the steps and replaced each rule of thumb with a measured one. If you have not picked an industry yet, start with our ranking of the best businesses to buy, then come back here for the process.

“Walking away is infinitely cheaper than a sunk business.”r/business

Step 1: Set your buy box by price band, not by industry

A buy box is the set of deals you will look at: price band, industries, states and how much of the work you will do. Set the price band first, because it decides the multiple you pay and whether a bank will lend. The median asking multiple rises from 1.35x under $100K to 5.44x over $5M (Main Street Index, 27,000+ US-dollar listings with a price and SDE).

Read the “cover loan + salary” column first. Before any salary, 89.5% of all listings would cover the loan. After an $80K salary, 48.8% do. Cheap businesses are cheap because they earn too little to pay a bank and an owner: the median business under $100K earns $50K. That is buying a job at best. Our budget guide runs the same test with a $50K salary and lands in the same place: the $250K to $1M band is where the math works most often.

Then pick industries inside your band. The table below lists, for each band, the industries whose listings most often clear the 1.25x test after the $80K salary (at least 30 listings each, look-alike templates removed).

The trades show up in every band under $1M: HVAC, plumbing, electrical, glazing and flooring earn $166K to $236K at multiples under 2x in the $250K to $500K band. Licensed trades come with a catch: a broker on r/buyingabusiness warns that for plumbing, HVAC and electrical the SBA will want an equity partner who holds the master licence. Decide your role too. Of 15,300+ listings that say who runs the business, 53.1% are owner-operated, 18.7% semi-absentee, 18.0% absentee and 10.2% manager-run. Our guide to the easiest small businesses to run sorts industries by that split.

“Stop trying to buy an absentee business. It is never actually absentee, the seller is always spending more time there than they are telling you.”r/buyingabusiness

Step 2: Find deals on listing sites, through brokers and off market

Most visible supply runs through brokers: 77.7% of US listings in the Main Street Index name a brokerage, and those listings are spread across 3,100+ firms. No broker sees the whole market. The 10 largest firms hold 11.9% of brokered listings, the top 100 hold 38.2%, and the median firm lists 4 businesses (US listings, October 2026).

That has two consequences. First, you have to search across sites and firms; one feed is a sample. Second, the largest firms specialise. Two of the ten largest firms are named for a single niche, one for restaurants and one for routes. See which firms list most in your industry in the broker view, and treat brokers as the seller’s agent, which they are. Our breakdown of who pays the broker when buying a business shows the seller’s fee adds only about 2.9% to a brokered ask. Our guide on how to find a business to buy shows which brokers hold each industry and how many listings sit on only one marketplace.

“A broker may get 100 inquiries on a good business. They will filter out 90 of them and focus on 10. If you’re not getting results in your search, you’re getting filtered out.”r/BizBuySell

Supply is also geographic. Florida has 13.1% of US listings (6,300+), California 10.9%, Texas 9.0% and New York 6.8%, so four states hold 39.8% of supply. If you live in a small state, widen the box or plan to relocate. Food and beverage is 27.4% of US listings at a median ask of $269K; technology and media is 1.6%.

Off-market deals are the other route. Retirement is 40.6% of 31,000+ stated reasons for selling, so owners in their 60s with no successor are the natural target. One buyer on a Google-ranked r/Entrepreneur thread described the cold approach that worked:

“I approached about 50 owners this past summer looking for a good fit... Most didn’t but a few said they’d be open to chat... Some backed out and eventually I found one to buy.”r/Entrepreneur

Budget the time. A buyer on a Google-ranked r/smallbusiness thread said their partner spent “close to a year (and half of that full-time) looking for a business to buy.” Browse current listings by industry and state to see how many deals your box actually holds before you commit to it. Our guide to buying from a retiring owner covers the off-market approach in detail.

Step 3: Screen each listing in ten minutes

Screening means rejecting most listings fast, using only what the listing says. Four checks remove the bulk: does it state earnings, is the multiple in line with its industry, does it carry a loan, and why is the owner leaving. 39.4% of US-dollar listings show an asking price with no SDE at all, so the first check alone removes two in five (Main Street Index, 49,900+ listings).

1. No earnings, no call. A price without SDE cannot be valued. Ask once, then move on.
2. Compare the multiple to its industry and size, not to 2.6x. 18.9% of listings with a comparable ask more than 1.5 times their industry-and-size median. Our free business price checker runs this comparison on one listing.
3. Run the loan test. Subtract an $80K salary from SDE, divide by 16.2% of 90% of the price. Below 1.25, the bank will likely cut the loan.
4. Read the reason for selling. Of 31,000+ stated reasons, 40.6% are retirement, 24.3% other business interests, 10.9% relocation, 3.5% health and 1.4% burnout. Only 0.2% admit financial distress, so the stated reason is a starting point, not a fact.

“Retirement is the single most overused reason in business brokerage. It shows up in listings for forty-five year old owners whose revenue has been quietly sliding backward for three consecutive years.”r/buyingabusiness

Two more flags move price. Listings that include real estate ask a median 6.27x versus 2.50x without (5,500+ listings with property), because you are buying a building too. And 12.3% of listings carry a price cut; they ask 2.23x against 2.68x for the rest, which makes them worth a second look, not a discount by default. For the full set of traps, read our 12 mistakes when buying a business and why owners sell.

Step 4: Value it on owner earnings you can verify

Small businesses are priced as a multiple of SDE, and 61.0% of US listings ask 3 times SDE or less (Main Street Index, 27,000+ listings with a multiple). The middle half of the market asks 1.73x to 3.72x, with a median of 2.61x. The multiple is only as good as the SDE it multiplies.

So rebuild SDE yourself. Start from the business tax returns, tie them to bank deposits, then add back only the owner’s salary, owner perks and genuine one-off costs. Remove anything the business still needs after you own it.

“Common fake add-backs are the owner car the route still needs, one-time costs that show up every year, and family payroll that is really labor. If you cannot rebuild the number from filings, haircut it hard or walk.”r/buyingabusiness

“First and foremost, you need tax returns as a final verification. A lot of businesses have bullshit books or provided bullshit books. I want to see what you’re declaring to the government.”r/smallbusiness

Then price on your number, not theirs. One r/BizBuySell post title says it in a line: your broker’s $275K SDE is probably $185K at the bank. At 3x, that gap is the difference between $825K and $555K. Revenue gives a rough sanity check: listings with $900K to $1.1M of sales ask a median $525K and state $215K of SDE (2,700+ listings), about half of sales. The step-by-step method, with industry ranges, is in our guides on how to value a small business and how much a business is worth. Industry medians and ranges sit on each industry page.

Step 5: Finance it with an SBA loan, cash and a seller note

Most first-time buyers finance a business with an SBA 7(a) loan (up to $5 million, used for changes of ownership), at least 10% cash, and often a seller note. The rules changed on October 1, 2026. Under SBA SOP 50 10 8.1, a first acquisition needs 1.25x debt service coverage on historical earnings, projections no longer count, and the 10% equity injection cannot be reduced (summary at EBIT Community).

A broker answering a Google-ranked r/smallbusiness question on financing summed up the default structure:

“The most popular SBA financing for business acquisitions is the 7(a) loan. It usually requires a 10% down payment and may require the seller to carry 10% in seller financing.”r/smallbusiness

What the new rules mean for a typical deal:

• Coverage is now a hard floor. That is why this guide tests every band at 1.25x. A deal that only works on projections is mispriced.
• The seller note helps, within limits. A note on full standby (no payments while the SBA loan is outstanding) can supply at most half of the 10% injection. Total debt cannot exceed the appraised value.
• The business portion amortizes over 10 years. Only real estate can run longer, which hurts property-heavy deals.
• Deals of $3M and up need a lender-ordered quality of earnings report, and its normalized earnings set the loan size.
• Sellers can stay as paid consultants for up to 24 months, double the old limit. Seller earnouts are still not allowed on SBA deals.

Seller financing is less common than the internet suggests. 20.1% of US listings (10,000+) say it is offered, 2.0% say it is not, and 77.8% are silent. Where the note size is stated (855 listings), the median is 30% of the price, with a middle half of 15.5% to 50%. And you pay for it: listings offering seller financing ask a median 2.74x, against 2.57x where it is not mentioned. Only 7.9% of listings mention SBA eligibility or pre-qualification at all. The full mechanics are in our guides to seller financing a business and the down payment to buy a business.

“A broker presents a listing with $275K in SDE, slaps a 3.6x multiple on it... You then hand the file to your lender and the deal dies in review because it fails the 1.25x DSCR requirement.”r/BizBuySell

Can you buy a business with no money?

Rarely, and not with an SBA loan. A first acquisition needs a 10% cash injection, and the seller note can cover at most half of it. With a median stated note of 30% (855 listings) and seller financing offered on 20.1% of listings, 100% seller-financed deals are outliers.

“$0 down payment is possible with SBA loans but not common... It’s far more common for a buyer to combine SBA with another loan to essentially get $0 down. A loan on home equity, an active 401(k), or from family are all popular.”r/smallbusiness

The realistic low-cash routes: a partner who brings the injection in exchange for equity, borrowed money for the injection from outside the business (home equity, family), or a very small business bought mostly on a seller note. The last one comes with the trap from step 1: the median sub-$100K listing earns $50K, which does not pay a salary and a note.

“The 100% seller finance crowd is delusional unless the ‘business’ is sub 100k.”r/buyingabusiness

Step 6: Sign a letter of intent that fixes the hard terms

A letter of intent (LOI) is a mostly non-binding offer that sets price and structure and grants you exclusivity, typically 60 to 120 days, to finance and investigate. Put everything you will later fight about in it. Only 21.3% of listings state how many weeks of training the seller will give, so the LOI is where you set it. Our letter of intent guide walks through each clause with the listing data that should set it.

• Price, and how it splits between cash at close, SBA loan and seller note (amount, rate, term, standby).
• What you are buying: assets or shares, equipment list, inventory at cost, working capital.
• Training and transition: weeks on site, then paid consulting, now allowed for up to 24 months on SBA deals.
• Non-compete and non-solicit for the seller.
• Conditions: financing, lease assignment, licence transfer, satisfactory diligence.

Be wary of a broker who wants an LOI and a deposit before you see financials. It happens often enough that buyers post about it.

“The broker is asking for an LOI and deposit before sharing the financials hoping that you psychologically commit.”r/buyingabusiness

Step 7: Due diligence on everything the listing left out

Due diligence is where you confirm what the listing claimed and find what it omitted. The omissions are large: 93.3% of listings never mention customer concentration, 91.0% never state the lease term and 85.6% never describe equipment condition (Main Street Index, 46,000+ listings with buyer fields).

The pattern is selective disclosure. Sellers who mention equipment call it new or updated 73.5% of the time and admit it is aging 1.0% of the time. Assume silence means the answer is not flattering, and check each item yourself:

• Financials. Three years of tax returns, monthly P&L for 24 to 36 months, bank statements, and a proof of cash that ties them together. Plot SDE by month to see a slow slide that annual totals hide.
• Customers. Revenue by customer for the top 10. If one customer is a large share of sales, price the risk or tie part of the price to keeping that customer.
• Lease. The median stated lease has 4 years left and 28.6% have two or fewer. Get an assignment and a renewal option before closing. Rent, where stated, runs a median $51.6K a year, 35.6% of stated SDE. Our guide to the commercial lease when buying a business finds only 20.3% of listings that state time left have the 10 years a typical SBA loan runs.
• Equipment. Where stated, median furniture, fixtures and equipment is $80K (17,000+ listings). Get ages and service records; budget replacement as a cost, not an add-back.
• Licences and legal. 12.3% of listings name a licence. Confirm what transfers, what must be re-issued and whether the business type is SBA-eligible under 13 CFR 120.110. Search for liens and lawsuits.
• People. The median listing that states headcount (2,600+) has 6 staff. Find out who holds the customer relationships and the know-how.

“Look at customer concentration. Understand that (most likely) this business is built on relationships the owner has with their customers. When he leaves, they will too.”r/smallbusiness

Use an accountant for the financials and a deal lawyer for the documents. Our due diligence guide shows how to check a listing against its industry with BigIdeasDB, and how to use AI to analyze a business for sale covers prompts for reading a CIM and tax returns. For every check in order, with the documents to request, use our due diligence checklist for buying a business.

Step 8: Close with an asset or stock purchase

Most small business sales close as asset purchases: you buy the equipment, customer lists, name and goodwill, and leave the seller’s old liabilities behind. A stock purchase takes the whole company, liabilities included, and is used when licences or contracts cannot be reassigned.

In an asset sale, both sides report how the price is split across asset classes on IRS Form 8594, which matters for your depreciation and the seller’s tax. Agree the allocation in the purchase agreement so both filings match. At closing you sign the purchase agreement, the bill of sale, the lease assignment, the seller note and the non-compete; the SBA lender funds; and inventory is counted the day before.

Keep cash back after the down payment. The first months of ownership bring repairs, payroll and slow receivables, and buyers who have done it say so plainly. Our breakdown of the hidden costs of buying a business puts the total at 13% or more on top of the asking price before inventory, and 34.2% of listings that state an inventory value sell that stock on top of the price.

“You need to budget for 3-6 months of working capital on top of your down payment, not just enough to close.”r/buyingabusiness

Step 9: Run a handover long enough to keep customers

The handover is the seller training you and introducing you to customers, staff and suppliers. Listings undersell it: 52.9% mention training, and where weeks are stated (10,600+ listings) the median is 3 weeks, 49.4% offer two weeks or less and 10.6% offer 12 weeks or more.

Three weeks is enough to learn the software, not to move relationships. Negotiate an on-site period plus paid consulting, and tie part of a seller note to the business keeping its revenue. One reply on a Google-ranked r/smallbusiness thread about a $300K retiring-owner deal laid out a staged plan:

“3 months you shadowing him in your client interactions, followed by 3 months of him still leading but you doing the hands-on work with those clients, then slowly work him out of the picture and have him still consult as needed for another year or so.”r/smallbusiness

Change little in the first 90 days. Meet the top customers with the seller, keep prices and staff, and learn the cash cycle before you touch it. Plan for surprises in year one; a buyer who has bought businesses before put it as “plan for surprises within the first 12 months of owning the business.”

How many listings survive a first-time buyer’s screens

Of 49,900+ US-dollar listings, about 6,000+ (12%) pass the three screens a first-time SBA buyer must apply: a $250K to $1M price, 1.25x loan coverage after an $80K salary, and an asking multiple no more than 1.15 times the industry-and-size median. That is the finding no listing site shows you, and it explains why searches take a year.

The biggest single cut is the loan test, which removes 43% of priced listings in the $250K to $1M band. The price-versus-industry screen removes few after that, because listings that cover the loan are rarely the overpriced ones. Then disclosure bites: fewer than 4 in 10 survivors say who runs the business, and only 8.3% state a lease term. Most of your diligence questions start as phone calls.

“I find that around 1 in 1,000 small businesses are desirable, transferable, has clean books, and a seller willing to accept a generous yet reasonable offer.”r/BizBuySell

You can run the same funnel on live data. The buyer view flags every listing as under, at or over its industry multiple, and the guide to buying a business with the Main Street Index walks through the filters. If you work in Claude or ChatGPT, the Main Street Index MCP tools return the same screens in a chat, and the Main Street Index docs list every field.

Is it a good idea to buy an existing business?

It is a good idea when the earnings are real, the price is in line with the industry, and the earnings cover a loan and your pay. On asking figures, the median US business pays back its price in about 2.6 years of owner earnings, before debt and salary. The established businesses on offer are old: where age is stated (4,900+ listings), the median is 12 years in operation.

The disadvantages are the ones above: you pay for goodwill up front, a lot of it can walk out with the seller, and listings hide equipment, lease and customer risk. On the buy side, the honest phrase is buying a job, which describes most owner-operated businesses under $250K.

“He was smart and bought it knowing it’s a job, because it is. It’s not passive income like owning a stock.”r/business

Our disadvantages of buying an existing business guide measures each risk, and business success rates compares survival odds for new and established firms.

Thinking of starting one instead?

Before you start one, see what it sells for. Starting costs less cash and more years: the median US listing with a price and SDE earns $170K and asks $395K, which is the price of skipping the build. The middle path is to start a business that is cheap to start and sells at a short payback, then buy a competitor’s book later.

The data favours service routes and trades for that path: pool service listings at $100K to $250K ask a median 1.06x, and our buyer-fit ranking puts commercial cleaning at 1.71x and building maintenance at 1.39x. Our cleaning business profitability guide, the local business ideas list and the decision table for what business to start start from the same listings. The home service business ideas page covers trades.

Guides for each step and each industry

This page is the hub of our business-buying series. Each guide below goes deeper on one step or one industry, with its own listing data.

• Choose: best businesses to buy, most profitable small businesses, best business by budget.
• Value and finance: valuing a small business, what a business is worth, seller financing, down payment.
• Risk: buying mistakes, disadvantages of an existing business, why owners sell, retiring owners.
• Industries: every industry guide is in the table below, with the one finding that sets that industry apart.

Buying guides by industry

The nine steps are the same in every industry; what you check at step 3 and step 7 is not. Each guide below runs the same Main Street Index tests on one industry’s listings. The right column is the finding from that guide’s headline answer that most changes how you would screen or price a deal.

What this data cannot tell you

• Asking, not closing. Every price and multiple is what the seller asks. Deals usually close below asking, and many die in diligence.
• Stated, not verified. SDE is the seller’s figure. Our loan test uses it as given, so real pass rates are lower once add-backs are cut.
• The loan model is illustrative. Rate, term and salary are assumptions. Your lender’s rate, fees and owner-pay adjustment will differ.
• Silence is not “no”. Disclosure rates measure what listings say, not what the business has.
• Listings are not all businesses. The data covers businesses for sale, mostly brokered, mostly US, captured in one snapshot. No time on market or trend claims.
• Templates. 713 look-alike listings (same industry, SDE and revenue in 3+ copies across 2+ states) were removed from the funnel and buy-box tables; they move band pass rates by under 1.5 points. Description-level clusters, such as contract courier routes, are not caught by this screen and are flagged in table notes.

Population. 49,900+ de-duplicated Main Street Index listings quoted in US dollars on an SDE basis (48,800+ in the US), captured from 29 sources in late September 2026. Multiples use the 27,000+ listings that state both price and SDE; the funnel and buy box use 26,600+ after the template screen. Our valuation and ranking guides quote 2.63x across 27,500+ listings computed directly from each listing’s price and SDE; this page uses the deal-metrics layer, which holds slightly fewer listings (27,000+), and the 0.02x gap is that population difference, not a change in the market.

Loan test. 10% down, 90% borrowed at an illustrative 10.5% fixed over 10 years (annual payment 16.2% of the loan), an $80K owner salary, and a pass at (SDE minus salary) of at least 1.25 times the payment, matching the SOP 50 10 8.1 floor for first acquisitions. Industry cuts need 30+ listings. Medians throughout.

Frequently asked questions