This Week’s Breakdown (in 10 Seconds):
If You Don't Understand Math, You Don't Understand How to Buy a Business
You find a listing that says the business earns $400K a year.
You start picturing what that money could do for you...
But that $400K isn't what ends up in your pocket.
We see it on almost every deal our Pro members bring us, and they've bought more than $300M in businesses with our help.
So in this week's video, I walk you through the 7 checks to run before you close:
Why a business with $430K in seller's earnings could leave you closer to $330K (and that's before you pay for the loan, taxes, and equipment)
How big a cushion SBA lenders now want above your loan payment (and why "I'll grow it after I buy it" won't count)
Why the equipment that comes with the deal isn't free (and why the seller's earnings usually leave it out)
How much cash has to stay in the business just to keep it running (and what to ask the seller to find out)
And 3 more, including what happens if a big customer leaves the year after you buy (and whether you could still make your loan payment)
But if you want to see how this plays out on a real deal, keep reading.
I'll show you how Alejandro went from tech sales to a $1.3M business at 28, with just 10% down 👇
Hello SMB Deal Hunters!
This is the same math our team works through with Pro members during diligence.
You can run it yourself, too.
But when a deal feels right, it's easy to miss a cost or two, and you often don't find out until after you close. It helps to have someone check the numbers with you before then.
As a quick reminder, SMB Deal Hunter Pro is our business buying accelerator where we help you find, finance, and acquire a business in 6-12 months...or work with you for free until you do.
Here's what that looked like for one Pro member who bought with our team in his corner 👇
Alejandro: Tech Sales to a $1.3M Business at 28 (Beat 10+ Buyers)
👤 Background: 6 years in tech sales (a Fortune 500 company, then AI startups), with zero experience in the industry
📍 Location: South Carolina
💼 Business acquired: Concrete coatings business, $1.3M
💰 Cash flow: ~$350K/year on just under $1.5M in revenue
📅 Time to close: 10.5 months (LOI at 7.5)
🏦 Financing: 10% down, with an SBA loan and a 15% seller note
💭 My 2 Cents: For six years, Alejandro kept jumping between tech sales jobs, sure the next company would be the one that finally felt right.
The pay was too good to give up sales altogether, so each time, he blamed the company.
Until his wife gave it to him straight: "I don't know if these companies are the problem... I think you're the problem... I think you need to just go out and do your own thing."
He started where most first-time buyers start: scrolling BizBuySell and messaging brokers about listings.
About a year in, he still hadn't made any real progress.
He didn't even know you had to sign an NDA before a broker would send you the details.
What finally changed it was a friend buying a business through SMB Deal Hunter Pro. He posted a photo of himself closing his laptop, captioned "Goodbye to corporate."
When Alejandro asked how he did it, his friend pointed him straight to us.
What almost stopped him (and how we helped)
1. His dream business didn't show up on the first try.
A lot of people think they'll start searching and stumble on to the right business. It's usually much more of a process.
We went through 7 deals with Alejandro before this one.
Two weeks before we found him the business he'd end up buying, he lost an LOI to a buyer who could pay all cash.
2. More than 10 other buyers wanted it.
His winning offer came in under the asking price, and he still beat every one of them.
It came down to more than price.
What put him over the top was the structure we helped him build (including a 15% seller note he negotiated) and the relationship he built with the seller.
3. His lender asked for more cash two weeks into underwriting.
A late change like that can sink a deal.
His case study shows how to keep two lenders moving side by side, so one lender can't hold your deal hostage.
Where he is today
10.5 months after joining, he closed. Today the business does just under $1.5M in revenue and about $350K a year in cash flow.
And he hasn't slowed down since. He learned to install the floors himself, door-knocked job sites, and closed deals on the spot.
He's already pulled in dozens of five-star reviews and landed a big commercial contract.
"I needed a couple of advisors that were literally gonna grab my hand and say, you're gonna go close on this business... And that's what I found."
He started where you are right now.
So if you want to buy a $1M+ business in 6-12 months but don't want to spend years figuring it out alone, let's talk.
👀 Quick Update: Just 12 days into November, 11 of our Pro members have signed LOIs, and 3 more have closed their deals.
We helped them source these deals (including off-market deals you won't find on BizBuySell).
We also worked with them 1:1 on calls and in Slack to structure winning offers, catch red flags, and secure financing.
We stayed with them all the way to close and through the transition.
Our typical member closes about 8 months after joining.
So if you want to own your first business in 2027, now's the time to start.
P.S. Found a listing you like? Run it through the 7 checks in the video, then book a call and we'll go through the numbers with you.
COMMUNITY PERKS
• Ready to buy and operate a $1M+ business? Get expert help at every step.
• Want to invest passively in SMB acquisitions? Get access to investment opportunities.
• Get a personal introduction to my preferred SBA 7(a) lender, non-SBA lenders, Quality of Earnings providers, or legal counsel
• Raising capital for your deal? I’ll connect you with investors from the SMB Deal Hunter Community.
• Interested in selling your business? I’ll help you connect with buyers from the SMB Deal Hunter Community.
THAT’S A WRAP
Want me to interview you for my podcast? Hit reply.
See you next week with some new deals!
-Helen Guo
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Disclaimer
This publication is a newsletter only and the information provided herein is the opinion of our editors and writers only. Any transaction or opportunity of any kind is provided for information only; SMB Deal Hunter does not verify nor confirm information. SMB Deal Hunter is not making any offer to readers to participate in any transaction or opportunity described herein.