Guides
Guides
Long reads in the order a purchase usually runs, from reading a listing to the first 100 days.
How to read a business-for-sale listing
A listing is a sales document written to win enquiries. This guide shows how to read its numbers, its wording and its gaps, and how to turn them into questions before you sign an NDA.
10 minutes to readSDE and EBITDA explained with worked examples
SDE and adjusted EBITDA both restate a business's profit for a buyer, but they answer different questions. This guide builds each one up line by line for two fictional businesses and shows which to use.
9 minutes to readHow small businesses are valued
Most small businesses are valued as a multiple of their earnings. This guide explains how the earnings basis is chosen, why size and quality move the multiple, and why an asking price is not a sale price.
11 minutes to readAdd-backs: which hold up and which do not
Add-backs turn the profit in the accounts into the earnings on a listing, and each one is paid for several times over in the price. This guide shows how to test them and which usually survive.
9 minutes to readCustomer concentration and why buyers discount for it
When a few customers account for much of a business's revenue, the earnings you are buying are less certain. This guide explains how to measure concentration, why it lowers the price and how to shape a deal around a dominant customer.
9 minutes to readOwner dependence and how to test it
In many small businesses the owner is the salesperson, the expert and the person every decision waits for. This guide explains why that lowers value and sets out practical tests you can run, from reading the listing to the last weeks of diligence.
9 minutes to readBuying an online business: SaaS, ecommerce and content compared
SaaS, ecommerce and content businesses are sold on the same marketplaces, but they earn money differently, fail differently and are valued differently. This guide compares the metrics, risks and diligence for each.
9 minutes to readFinancing an acquisition: deposits, lenders, seller finance and earn-outs
Most business purchases combine the buyer's own money with a loan and often some deferred payment to the seller. This guide explains each layer, outlines government-backed lending by country and shows how lenders test whether a deal can carry its debt.
11 minutes to readFrom first call to letter of intent
The steps between spotting a listing and signing a letter of intent, what to learn at each one and what a sound letter of intent should cover.
10 minutes to readDue diligence: what to check and in what order
A sequence for due diligence that tests what could end the deal first, while it is still cheap to find out, and leaves the detailed and expensive work until the deal looks sound.
10 minutes to readWorking capital, inventory and what the price includes
Why the headline price is rarely the amount that changes hands, and how working capital pegs, inventory at cost and cash-free, debt-free terms decide what you actually pay for.
10 minutes to readThe first 100 days after you buy
How to use the first 100 days after completion: keep customers, staff and cash steady, learn the business before you change it, and start fixing the risks you found in diligence.
8 minutes to read
Red flag library
40 warning signs, each with why it matters, how to spot it, questions to ask and documents to request.
Checklists
Tick through them on screen. With a free account your progress is saved and you can download each one as a PDF.
Twenty-minute listing screen
A quick first pass over a business-for-sale listing, so you can decide whether it deserves a call, an NDA or neither before you spend more time on it.
About 20 minutesQuestions for the first seller call
Questions to cover on a first call with a seller or their broker, grouped so the conversation stays natural and you still leave with the facts you need.
About 45 minutesDiligence document request list
The documents to ask for once terms are agreed in principle, grouped by area so the seller can fill a data room in order and you can see what is still missing.
About 30 minutesOnline business diligence for SaaS, ecommerce and content
The checks that matter most when a business lives online: live account access, traffic, platforms, ownership of digital assets, code and the revenue behind the dashboards.
About 120 minutesHandover and the first 30 days
What to settle before completion and what to do in the first month after you buy, so customers, staff and suppliers stay with the business while you learn how it runs.
About 30 minutes
Glossary
60 terms defined in plain English, each with a worked example. Terms are linked from the guides the first time they appear.
- Add-backs
- Adjusted EBITDA
- Annual recurring revenue (ARR)
- Asking price
- Asset sale versus share sale
- Business broker
- Capital expenditure
- Cash-free, debt-free
- Change of control clause
- Churn
- Completion accounts
- Customer acquisition cost
- Customer concentration
- Customer lifetime value
- Data room
- Debt service coverage
- Deferred revenue
- Depreciation and amortisation
- Disclosure letter
- Due diligence
- Earn-out
- EBITDA
- Enterprise value
- Equity value
Country primers
How buying a business typically works, country by country.
Buying a business in the United States
How buying a business usually works in the US: asset and stock purchases, SBA-backed and other financing, what happens to employees, and the tax and regulatory checks to plan for.
Buying a business in the United Kingdom
How buying a business usually works in the UK: share and asset purchases, financing, TUPE and employees, and the tax and regulatory checks to plan for before you sign.
Buying a business in Australia
How buying a business usually works in Australia: business and share sales, financing, what happens to employees under the Fair Work rules, and the tax and regulatory checks to plan for.
Buying a business in Canada
How buying a business usually works in Canada: share and asset purchases, financing including BDC and government-backed loans, provincial employment rules, and the tax and regulatory checks to plan for.
Buying a business in South Africa
How buying a business usually works in South Africa: share sales and going concern sales, financing, section 197 and employees, and the tax and regulatory checks to plan for.
Learn at your own pace
Buying a business in 10 emails
One short email every few days, each linked to a guide. Only an email address needed, and you can unsubscribe with one click.
Free tools
See a low, likely and high value from the figures you have, and whether the asking price holds up.
Answer about 15 quick questions about a listing to see which areas need checking.