Our Process & Target

Seeking Investors Beginning August 2026

How Businesses are Valued

Businesses sales are common in the US and are typically listed by owners looking to retire, cash out, and/or move on to other ventures. Around 100,000 small businesses are sold in the US every year.

All businesses listed for sale revolve around something called a Multiple. The listed price of a business is calculated by multiplying a business's EBITDA (the profits that it makes per year) by this negotiable number (The Multiple)

Annual Profit per Year * Multiple = Listing Price
$500,000 * 3.9x = $1,950,000

Depending on the nature and size of the business, most listings have a Multiple of 2x to 7x. In order to make financial sense for our acquisition, the multiple of our acquired business will need to be less than 4.2x.

Defining our Target Business (Done)

The financial criteria for our first business acquisition is one that fits into the following ranges, ranked in order of importance:

Multiple: 3.0x - 4.2x
Purchase Price: $1.2M - $2.7M
SDE (Seller’s Profit per Year): $300k - $900k

As for industry criteria, our target is a well-established (minimum 5+ years old) brick and mortar service business with steady revenue and high resistance to industry change (low risk of AI taking it over).

Right now, we've identified a Liquor Store as an ideal candidate to meet these criteria, but remain open to other businesses that check these boxes during our search.

Currently, we're prioritizing locations in the DC, TX, or FL area.

The Search (Happening Now)

Our primary partner is Transworld Business Advisors, a national brokerage chain with ample experience closing small business acquisitions (15,000+ closings over their history).

Here's how the search process typically breaks down:

Brokers present businesses for sale (weekly)
Buyer identifies a business they like
Both parties sign an NDA to validate basic info
If buyer wishes to move forward, buyer signs an LOI (Letter of Intent) to purchase
Once an LOI is signed, the due diligence process begins (next section)

As of June 2026, we've found a liquor store in the DC area that interests us, and are evaluating whether or not to sign an LOI.

Due Diligence (3-4 Months)

Once we sign an LOI, we enter an exclusivity period to "open the hood" of the business. This is a rigorous process to ensure the financial and operational health of the company matches the seller's representations.

We'll utilize outside vendors and experts heavily throughout this process:

Financial Health: Hiring a specialized firm to perform a Quality of Earnings (QofE) report, validating tax returns and bank statements to confirm EBITDA is accurate.

Legal Traps: Bringing in a lawyer to conduct a full audit of leases, licenses, and equipment to ensure there are no hidden liabilities - as well as to review all closing documents.

Lender Coordination: Working with our SBA partners to finalize loan underwriting based on our findings above (more on these SBA loans in the next section).

If red flags emerge at any point in the due diligence phase, we aren't locked into a purchase yet - and can always renegotiate or walk away.

Financing & Payment (2-3 Months)

We'll be financing the $1M - $3M acquisition with an SBA 7(a) loan. The main elements of these loans are as follows:

Maxmimum amount of $5M
Down payment requirement of 10%
Normal interest rates of 10% - 12%
Backed by the US Government (Small Business Administration), with 70,000 of them approved per year ($35 Billion)

This means that an SBA 7(a) loan for our target size business ($1M - $3M price) would require a 10% down payment of $100k - $300k.

The funding from SBA 7(a) loans can be used for all elements of the transaction/acquisition, inclusing closing costs and working capital. A detailed example of one of these loans can be found on the Cash Flow page.

Closing Day Onwards (Long-Term Operating)

Once acquired (closing documents are signed), we effectively take over the business that same day. Our #1 priority once operating will be to cover all debt financing (investor payments and SBA Loan payments), which we should be able to start doing from Day 1 (again, see Cash Flow).

We’ll largely continue operating the business as it had been in the past - but we’ll naturally look for small ways to improve (more SEO marketing spend, implementing AI automation tools, etc.).

For at least the first full year, we’ll be extremely hands-on. Our plan is to be physically present on-site for at least 40+ hours per week to ensure the business remains successful.