Build An Acquisition Thesis
Review the acquisition engine at channel level rather than relying on total sessions or users. Separate organic search, paid media, direct, referral, email, social and marketplace traffic, then compare their trends over time. A business with several durable channels has a different risk profile from one whose economics depend on a single ranking, ad account or marketplace.
Ask for source access where practical and inspect the pages, campaigns, keywords or products producing the result. Look for sudden changes, tracking gaps, branded versus non-branded demand, paid spend required to sustain revenue and geographic or device concentration. For search-driven sites, examine whether a small number of pages or queries carry a disproportionate share of traffic.
The buyer’s question is transferability: will these acquisition channels still function under new ownership? Document accounts, permissions, creative assets, tracking, historical data and relationships that must transfer. If a channel depends heavily on the seller’s identity or a non-transferable account, value it accordingly.
Choose A Business Model
Write down acquisition criteria before reviewing opportunities. Include the business models you understand, maximum capital at risk, desired owner workload, minimum evidence requirements and deal-breakers. This prevents an attractive story from quietly changing the strategy after you begin browsing.
Use a two-stage screen. First decide whether the opportunity fits the thesis; only then spend time verifying financials, traffic, customers, operations, technology and legal ownership. Record unresolved questions so enthusiasm does not turn assumptions into facts.
Before making an offer, model a base case and a downside case. Include the cost of replacing seller labor, required reinvestment and plausible declines in a concentrated channel or customer. The purchase should still make sense under assumptions you can defend.
Find Businesses For Sale
Define what this step is meant to prove before collecting documents. Good diligence connects a claim to evidence, identifies what remains uncertain and asks whether the issue can materially affect future cash flow or transferability.
Compare the current state with historical patterns. One month or one screenshot rarely tells the full story. Look for trends, exceptions and dependencies, then ask the seller to explain material changes with evidence that can be independently checked where practical.
Record the conclusion and its effect on the deal. Some findings simply confirm the thesis; others change valuation, transition planning or transaction terms. The purpose is a better-informed decision, not paperwork for its own sake.
Screen Opportunities
Write down acquisition criteria before reviewing opportunities. Include the business models you understand, maximum capital at risk, desired owner workload, minimum evidence requirements and deal-breakers. This prevents an attractive story from quietly changing the strategy after you begin browsing.
Use a two-stage screen. First decide whether the opportunity fits the thesis; only then spend time verifying financials, traffic, customers, operations, technology and legal ownership. Record unresolved questions so enthusiasm does not turn assumptions into facts.
Before making an offer, model a base case and a downside case. Include the cost of replacing seller labor, required reinvestment and plausible declines in a concentrated channel or customer. The purchase should still make sense under assumptions you can defend.
Evaluate Earnings Quality
Start with source records and reconcile them across a consistent period. Bank or payment-processor records, accounting exports, marketplace statements and read-only dashboards can each answer different questions. The goal is not simply to reproduce the seller’s profit number, but to understand how revenue is earned, which costs are necessary to keep earning it, and whether reported performance is repeatable.
Normalize unusual items carefully. Owner add-backs, one-time costs, discretionary expenses and recent changes can be legitimate adjustments, but every adjustment should have a reason and supporting evidence. Compare monthly trends, look for seasonality and identify revenue or cost items that changed shortly before the sale process.
Translate findings into the deal. If an important number cannot be verified, model a conservative case rather than assuming the best outcome. Material uncertainty can justify additional diligence, a different price, a holdback or another structure appropriate to the transaction.
Assess Customer Acquisition
Review the acquisition engine at channel level rather than relying on total sessions or users. Separate organic search, paid media, direct, referral, email, social and marketplace traffic, then compare their trends over time. A business with several durable channels has a different risk profile from one whose economics depend on a single ranking, ad account or marketplace.
Ask for source access where practical and inspect the pages, campaigns, keywords or products producing the result. Look for sudden changes, tracking gaps, branded versus non-branded demand, paid spend required to sustain revenue and geographic or device concentration. For search-driven sites, examine whether a small number of pages or queries carry a disproportionate share of traffic.
The buyer’s question is transferability: will these acquisition channels still function under new ownership? Document accounts, permissions, creative assets, tracking, historical data and relationships that must transfer. If a channel depends heavily on the seller’s identity or a non-transferable account, value it accordingly.
Perform Due Diligence
Define what this step is meant to prove before collecting documents. Good diligence connects a claim to evidence, identifies what remains uncertain and asks whether the issue can materially affect future cash flow or transferability.
Compare the current state with historical patterns. One month or one screenshot rarely tells the full story. Look for trends, exceptions and dependencies, then ask the seller to explain material changes with evidence that can be independently checked where practical.
Record the conclusion and its effect on the deal. Some findings simply confirm the thesis; others change valuation, transition planning or transaction terms. The purpose is a better-informed decision, not paperwork for its own sake.
Value The Business
Valuation begins with a consistent earnings base, not a multiple pulled from a headline. For smaller owner-operated businesses, Seller’s Discretionary Earnings may help show cash flow available to one working owner; EBITDA is more common as businesses become larger and management compensation is treated differently. Normalize the chosen metric before applying any range.
A multiple is shorthand for many underlying judgments. Growth quality, customer and channel concentration, margins, recurring revenue, owner workload, defensibility, documentation and transferability can all affect how buyers view the same dollar of earnings. Comparable transactions are useful context only when the businesses and deal terms are genuinely comparable.
Build a range and test scenarios rather than presenting a single precise answer. Consider the cash paid at closing as well as financing, earnouts, working capital and transition obligations. The economically attractive deal is not always the one with the lowest headline multiple.
Negotiate And Close
Define what this step is meant to prove before collecting documents. Good diligence connects a claim to evidence, identifies what remains uncertain and asks whether the issue can materially affect future cash flow or transferability.
Compare the current state with historical patterns. One month or one screenshot rarely tells the full story. Look for trends, exceptions and dependencies, then ask the seller to explain material changes with evidence that can be independently checked where practical.
Record the conclusion and its effect on the deal. Some findings simply confirm the thesis; others change valuation, transition planning or transaction terms. The purpose is a better-informed decision, not paperwork for its own sake.
Plan The First 90 Days
Define what this step is meant to prove before collecting documents. Good diligence connects a claim to evidence, identifies what remains uncertain and asks whether the issue can materially affect future cash flow or transferability.
Compare the current state with historical patterns. One month or one screenshot rarely tells the full story. Look for trends, exceptions and dependencies, then ask the seller to explain material changes with evidence that can be independently checked where practical.
Record the conclusion and its effect on the deal. Some findings simply confirm the thesis; others change valuation, transition planning or transaction terms. The purpose is a better-informed decision, not paperwork for its own sake.