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“A business is simply an idea to make other people’s lives better.”

— Richard Branson

Did you know that you could buy a business for 1x to 3x earnings?

In some cases, a business producing $1 million in cash flow per year can be purchased for $1 to $3 million.

You often only need to put 15%-25% down and the rest can be financed.

For $150,000 to $450,000, you could have a business producing $1 to $3 million per year.

That’s pretty incredible!

We also have a silver tsunami coming.

A large group of people will reach retirement age very quickly.

Baby boomers, as we call them, will retire in large numbers that will overall hurt the economy, according to this article on the subject.1

Furthermore, a study from the Exit Planning Institute found that 70% of business owners 50 or older were planning to exit their business in the next 10 years.

I would say the number is probably higher than that.

A lot of these smaller businesses will not be sold by their owners.

There’s opportunity there.

If a business makes anywhere from $3 to $10 million a year, bigger businesses and private equity groups will go after them.

But when the business is smaller, it’s harder to find buyers.

Today, we’re going to talk about how to buy a business and if you have to be active or passive.

I’ll give my best tips in three easy steps and tell you my favorite type of business to own.

Let’s jump into it!

1. Entering the Entrepreneurial Journey


When you’re looking to buy a business, it’s an entrepreneurial journey.

If you already own a business, you’ll understand what I mean.

If you don’t, buying a business will be a great opportunity to learn how businesses work.

In 2024, we need to understand the current acquisition climate.

We have all these aging people.

People are willing to slosh around their money.

That creates opportunities.

One question I ask myself is: “What’s the best way to buy a business?”

How can you find out ways to do that?

There are websites like bizbuysell.com.

It’s a great way to learn what’s out there and what is selling.

There are business brokers very similar to real estate brokers who are selling and marketing these deals.

Another great resource is working with financial professionals, CPAs, and legal professionals.

If you network, you can find business owners looking for similar opportunities.

There are multiple psychological benefits for networking as well according to this study, including:

  •     Increased job satisfaction
  •     Positive career outcomes
  •      Improved overall wellbeing

A friend of mine spent six months discovering what type of business he wanted and what area he wanted to be in.

He settled on a certain size of home care business.

For his process of research, he sent out 24 handwritten letters.

He ended up getting six or seven responses and eventually found his perfect match.

But this strategy may not work for everyone, so you need to spend some time figuring out your own purchasing process.

2. Navigating the Purchasing Process

Navigating the purchasing process takes some work.

You can’t just go in and all of a sudden there’s a business you can buy.

There’s a fair amount of diligence that goes into the entire process.

In a good scenario, it takes three to six months.

It also costs money.

There’s something called a quality of earnings, which can cost thousands of dollars.

That step gets into all of the business’s financial statements to make sure everything checks out.

Aka: Does the company make as much as they say?

Is the owner recording all of their expenses?

You should work with the seller during this process.

You need to get an LOI, or a letter of intent.

It’s a non-binding agreement.

Typically, there’s some sort of exclusivity cause saying they won’t market the property to other people while you’re looking into things.

You should also look into the legal complications.

Specifically, you should watch out for legal liabilities.

This all takes time.

It’s a lot of work.

But when you’re done, you’ll hopefully have a business where you don’t have to be active in the running of things.

Private equity funds like BlackRock do this.

Sometimes the smaller deals are some of the better deals they get.

This plays into a private equity rollup strategy

For that, you need to buy 10 to 20 small businesses, package them together, and sell them off for a higher multiple.

You could pay 5x earnings for the businesses and sell them for 20x the earnings.


We’ve used this strategy with car washes and it’s been very effective.

3. Trends and Technologies Shaping Acquisitions

The third thing you should pay attention to is trends in technology that are shaping acquisitions.

In general, you need to look at the types of businesses you want to buy.

You can find out this information on bizbuysell.com or other similar websites.

Attending networking events can also provide important information on many different business types.

If you’re buying a simple business like something in pet care or cleaning, those commonly trade 1x to 5x earnings.

More complex businesses such as SAAS (software as a service) or other tech businesses could go for 10x to 20x earnings or higher.

My friend Joe talks about how you can use your own unique skills to add value.

My background is sales.

If companies have trouble getting people to hear about them, that’s where I can shine.

Another way to improve your skills is by reading.

Reading not only improves your knowledge but also your overall health, according to this scholarly review.3

Here are some of my top recommendations:

Buy Then Build by my friend, Walker Diebel, which is a great one to start with.

The second book is called The Private Equity Playbook by Adam Coffey.

Before I go, I want to talk about my favorite kind of business.

I love buying businesses where I don’t have to be involved in the actual business.

My sweet earnings spot is usually between $1 million and $3 million.

Anything earnings higher than that is targeted by private equity groups.

I want to do the work to buy the business, and then after I buy it, I can be more passive or find a partner who wants to get more involved.

Now I want to hear from you!

What kinds of businesses do you have your eyes on?

Let us know in the comments.

Before you leave, make sure to check out our special report about inflation investing. It shares the best choices to invest during an inflationary environment.

If you are interested in investing with us, we are happy to answer any questions that you may have. Join our investment club today and we will be in touch.

Check out my bestselling book on Amazon!

Disclaimer: I am not your investment advisor. This is for educational purposes only. I am not giving specific advice on what you can do. I am simply giving my opinions.

Works Cited

1.     G. Collins. “Rethinking Retirement in the Context of an Aging Workforce.” Journal of Career Development, 30 (2003): 145-157. https://doi.org/10.1177/089484530303000204.

2.     Judith Volmer and Hans-Georg Wolff. “A Daily Diary Study on the Consequences of Networking on Employees’ Career-Related Outcomes: The Mediating Role of Positive Affect.” Frontiers in Psychology, 9 (2018). https://doi.org/10.3389/fpsyg.2018.02179.

3.     L. Kourkouta, C. Iliadis, A. Frantzana and Vakalopoulou. “Reading and Health Benefits.” , 3 (2018). https://doi.org/10.4172/2472-1654.100149

Bronson Hill

Bronson used to work as a consultant for a medical device company but switched to investing in apartment buildings to make his money work for him. He started with a single rental property that made good money and, after some advice from a family member, moved into bigger real estate projects. Now, he's all about helping others get into this kind of investment to earn money without having to work all the time. When he's not dealing with investments, Bronson loves to travel, write songs, stay active, and help fight modern slavery through his work with Dressember. He believes in working smarter, not harder, and wants to share how that's possible with everyone.

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