Buying a small business is mostly a matter of doing ordinary things in the right order. The buyer who talks to a lender before making an offer knows what stack they can carry; the buyer who writes the document list before the letter of intent gets the documents; the buyer who agrees the allocation before closing does not argue about it afterwards. This page is that order, with the two free sheets on this site placed at the steps where they do the arithmetic.
First the lender, then the target
A conversation with an SBA lender before there is a target tells the buyer what share of a price they can borrow and at what rate, which fixes the stack. On the calculator's worked example that is 80% at 10.5% over 10 years, and it makes a $450,000 business a $110,000 day once working capital and closing costs are added. Knowing that first stops the buyer from falling for a business they cannot fund.
Then the list, dated, before the letter
Write the document list and send it with the letter of intent, so the seller knows the pace from the start. On the checklist sheet's example 24 items requested and 16 received by day 20 of 60 is 67% complete with 8 outstanding and 40 days left, one a week to chase. A list that is only written after the letter arrives late and is chased in the final fortnight.
Then the offer, the coverage and the split
Make the offer at a price whose payments the earnings cover after the buyer's own pay: $90,000 against $68,731.68 is 131% on the example. Agree in the same agreement how the price is allocated across the assets, because both sides report that split to the IRS and a split agreed later is a split argued. The register in Pro keeps the offer, the stack and the allocation together.
Questions people ask about buying a small business
How small is a small business here?
Small enough that the buyer is doing this work themselves rather than paying a deal team. The arithmetic is the same at $200,000 and $2,000,000; the U.S. Small Business Administration's 7(a) program lends up to $5 million.
Do I need an attorney and an accountant?
Yes, for the agreement and the allocation respectively. This site does neither job; it keeps the file they both read.
What is Keysvo Pro?
The register for the purchase: targets, offers, dated diligence items, lender and closing date, for $14 a month for you and everyone helping.