EP #5: Smart Buyers' Guide to Business Acquisition

Horizon Business Brokers

The path to successful business ownership often begins with acquisition rather than starting from scratch. But how do you ensure you're making the right choice when investing substantial capital into someone else's creation?
Dustin Zeher, a veteran business broker, breaks down the essential elements that smart buyers prioritize when evaluating potential business acquisitions. The conversation begins with defining your "buy box"—the critical criteria that will guide your search, including industry preferences, size requirements, and lifestyle considerations. Should you seek a business demanding your full-time attention, or one that allows for semi-absentee ownership? These fundamental questions lay the groundwork for a successful match.
Perhaps the most revealing insight comes when discussing the common mistakes buyers make. Many focus exclusively on revenue figures or chase businesses they lack passion for, setting themselves up for eventual burnout. Zeher emphasizes that sustainable success requires both genuine interest in the business and a thorough understanding of its financial health—specifically its cash flow or Seller's Discretionary Earnings (SDE).
The conversation delves deep into evaluating cash flow sustainability, identifying red flags like customer concentration risks and owner dependency, and exploring financing options from SBA loans to seller financing. Particularly fascinating is the discussion of company culture and how it impacts acquisition success. Zare shares a compelling example where a seller accepted $20,000 less than the highest offer because they believed the buyer would better preserve their company's culture and take care of their team.
Whether you're contemplating your first business purchase or looking to expand your portfolio, this episode provides invaluable guidance on approaching acquisitions strategically rather than emotionally. Ready to find your perfect business match? Listen now and discover how to evaluate opportunities like a seasoned professional.

Call Horizon Business Brokers at 703-910-7384 or visit horizonbrokers.com to begin your exit planning journey today.