The business buying process is 9 stages: decide what you'd buy, find deals, screen them down, value the one worth chasing, make an offer, line up the money, do diligence, sign and close, then run the thing. Start to finish it usually takes 6 to 12 months. Most people only ever see stage 5, and that's exactly why their first deal goes sideways.
I'm gonna walk the whole thing as a timeline — one stage at a time, in order — the ground-level version of how to buy a business. For each one: what actually happens, who's in the room, how long it takes, and the gate you have to clear before the next stage starts. No fluff, no "and then you simply close." The simply is where deals die.
First, the honest headline number. From the day you get serious to the day money wires, a typical small-business acquisition runs 6 to 12 months — fast ones close in ~3, complicated ones drag past a year. If you're going the full search-fund route, the finding part alone often eats 12 to 24 months before you even sign anything. The two big time sinks, every time, are sourcing and diligence. Everything else moves faster than people expect.
And if you're still on "should I buy at all instead of starting from scratch," go read buy vs build first — the bank's own default numbers settle that one. This piece assumes you've already decided to buy. Here's how the buying actually happens.
Stage 1 — Decide and define your buy box (1-4 weeks)
Before you look at a single listing, you write down what you'd actually buy. That document is your buy box, and skipping it is the most expensive shortcut in this whole process — it's what makes people fall in love with a bad deal at stage 3.
A real buy box pins down a handful of things: industry, size (usually measured in SDE — seller's discretionary earnings — or revenue), geography, and how dependent the business is on the current owner. That last one matters more than people think. A business that only runs because the owner personally knows every customer is a job you're buying, not an asset.
Who's involved: just you, honestly. Maybe a spouse or a partner you're buying with. This is a thinking stage, not a meeting stage.
The gate: you can describe in two sentences the business you'd write a check for. If you can't, you're not ready to source — you'll just react to whatever shows up, and the market will happily waste your year for you.
Stage 2 — Find deals / sourcing (the long one: 1-12+ months)
This is where most of your calendar goes, and where most aspiring buyers quietly give up. There are two ways deals reach you: on-market and off-market.
On-market means it's listed — usually with a business broker, posted on the marketplaces (you can browse businesses for sale by state). The upside is they're real and they're for sale. The downside is everyone else is looking at them too, the same listing gets posted across 5 different sites under 5 slightly different descriptions, and a chunk of what you're scrolling already sold weeks ago and nobody took the listing down.
Off-market means the owner hasn't listed and might not even know they're a seller yet — but they'd sell to the right buyer. This is where the good deals are, because there's no broker, no bidding war, no 12-buyer auction. The catch: you have to go find these owners and start the conversation yourself, which is slow, manual work.
Who's involved: you, brokers (for on-market), and the owners themselves (for off-market). This is the stage where having a system beats having hustle.
This is the actual reason I'm building DealStratum. It pulls the on-market listings from across the sources we track into one deduped feed you filter straight down to your buy box — so you stop scrolling the same listing 5 times — and it helps you reach the off-market owners who'd sell but never put up a listing. It doesn't value the business, doesn't lend you money, doesn't do your diligence. It just makes the finding a lot less of a shit show. There's a deeper walkthrough in how to find a business to buy.
The gate: you've got a steady flow of deals that fit your buy box landing in your pipeline. Not one deal — flow. You want options, because the math on most of them won't work, and that's fine.
Stage 3 — Screen and triage: teaser, NDA, CIM (days per deal)
Now you've got deals coming in and you need to kill the bad ones fast. Screening is a funnel, and it has a specific shape on the broker side.
It usually goes: a teaser (a one-pager, no company name, just the shape of the deal — industry, rough revenue, location) → you sign an NDA if it's interesting → you get the CIM, the Confidential Information Memorandum, which is the full sales document the broker wrote to make the business look as good as legally possible.
The CIM is where you do most of your early killing. The whole skill here is reading it like a skeptic, not a buyer — the broker's job is to present, your job is to find what they left out. (What a CIM actually is and what's in it: what is a CIM. How to actually read one without getting sold: how to read a CIM.)
Who's involved: you and the broker, mostly. You're trying to get to a clear yes or no without wasting a week per deal.
This is the other place DealStratum earns its keep — you can drop a CIM in and get SDE, the add-backs, the revenue trend, and customer-concentration flags pulled out for you, so the screen takes minutes instead of an afternoon of squinting at a PDF. It tells you what's worth a second look. It doesn't tell you to buy.
The gate: one deal (or a couple) survives the read and is worth real work. Everything else goes in the no pile, fast and without guilt.
Stage 4 — Value it (1-2 weeks)
A deal survived screening. Now you figure out what it's actually worth to you — which is not the same number the broker put on it.
Small businesses generally trade on a multiple of earnings. The earnings number is usually SDE for owner-operator deals or EBITDA for bigger ones, and the multiple is where all the argument lives. For reference, the median small business that actually sold in 2024 went for about $345,000 at roughly 2.6x cash flow — that's BizBuySell's 2024 numbers, and it's a much smaller world than the $5M deals you read about online.
The trap is paying for the seller's adjusted earnings without checking whether the add-backs are real. "We add back the owner's salary, the truck, the boat, the trip to Cabo we called a conference" — some of those are legit, some are the seller padding the number. Valuation is mostly the work of separating the two. Full method: how to value a small business.
Who's involved: you, and ideally an accountant who's seen these deals before. You don't need a formal appraisal yet — that comes later if you finance.
The gate: you have a price you'd actually pay and the math behind it. That number is what your offer is built on.
Stage 5 — Make the offer: the LOI (1-2 weeks to agree)
This is the stage everybody pictures when they think "buying a business," and it's shorter and less dramatic than the movies. You make an offer with a Letter of Intent — the LOI.
The LOI is mostly non-binding, and that's the point. It lays out price, deal structure (how much cash, whether there's a seller note or an earnout), the rough timeline, and — critically — an exclusivity period that locks the seller into dealing only with you while you do diligence. You're not committing to buy. You're saying "here's my serious offer, take the business off the market and let me look under the hood."
There's almost always a round or two of back-and-forth on price and terms before both sides sign. What goes in an LOI, what to never give away in it, and how to structure the offer: the letter of intent.
Who's involved: you, the seller, the broker brokering the back-and-forth, and a transaction attorney you really should have read it before you signed.
The gate: a signed LOI with an exclusivity window. The clock now starts on diligence and financing, which run partly in parallel.
Stage 6 — Line up financing (overlaps diligence; ~60-90 days)
With a signed LOI in hand, you go get the money. Most regular buyers aren't writing a check for the whole thing — they're stacking sources, and the SBA 7(a) loan is the workhorse for deals this size.
A typical capital stack is some of your own cash, an SBA-backed loan for the bulk of it, and often a seller note where the seller finances part of the price and gets paid out of the business over a few years. With an SBA loan you're usually putting down somewhere around 5-10% — frequently less than a house down payment, which surprises people every time.
Plan on the SBA process taking real time. From signed LOI to funded, an SBA 7(a) acquisition loan typically runs 45 to 90 days, longer if it's complicated. This is why you start financing the moment the LOI is signed — it runs alongside diligence, not after it. Your full options, the stack, and how to not blow the timeline: how to finance a business acquisition.
Who's involved: you, an SBA lender (a specialist one is worth it), the seller for the note, and your accountant feeding them numbers.
The gate: a commitment from a lender, not a vibe. "They said it looks good" is not financing. A commitment letter is.
Stage 7 — Due diligence and Quality of Earnings (2-8 weeks)
This is the second big time sink, and the one that saves you from buying a lie. Diligence is where you verify that everything in the CIM is actually true — financially, legally, and operationally.
The financial centerpiece is a Quality of Earnings report — a QoE. You hire an accountant to tear into the books and confirm the earnings are real, recurring, and not propped up by one giant customer or a creative add-back. For a small business, a QoE typically takes 2 to 4 weeks and runs roughly $7,000 to $30,000 on sub-$5M deals. It's the single best money you'll spend in the whole process. What it covers and how to read one: quality of earnings.
Diligence isn't only financial. You're also checking legal (contracts, leases, litigation, licenses), operational (does it run without the owner?), and customer concentration. If 60% of revenue is one client who golfs with the seller, you need to know before you wire, not after.
Who's involved: you, a QoE accountant, an attorney, and the seller — who's now under exclusivity and has to actually hand over the documents. How fast they respond is the single biggest factor in how long this stage takes.
The gate: diligence either confirms the deal or it doesn't. This is your last clean exit — most LOIs let you walk if diligence turns up something ugly. Walking away here is a win, not a failure. A bad deal you didn't buy is the cheapest deal you'll ever do.
Stage 8 — Purchase agreement and closing (2-4 weeks)
Diligence checked out and the lender's committed. Now the non-binding LOI becomes a binding contract — the Purchase Agreement (an asset purchase agreement or a stock purchase agreement, depending on how the deal's structured).
This is lawyer territory. The agreement nails down exactly what you're buying, the reps and warranties (the seller's legal promises that what they told you is true), how the price gets paid, what happens if something was misrepresented, and any transition help the seller owes you after close. Then everything converges on a closing date: final loan docs, the wire, signatures, keys.
Who's involved: you, the seller, both sides' attorneys, the lender, and usually an escrow or closing agent moving the money. The brokers ride it to the finish line because that's when they get paid.
The gate: you close. Money wires, the agreement's signed, and you legally own a business. This is the day people picture as the finish line — it's actually the starting line.
Stage 9 — Transition and the first 90 days (ongoing)
You own it. Now you have to not break it. The first 90 days decide whether you bought a business or bought a problem, and the whole game here is the opposite of the takeover energy you'd expect.
The mistake new owners make is walking in on day 1 and changing things. Don't. The early job is keeping it stable — the employees are watching to see if the new owner is about to wreck their jobs, the key customers are watching to see if service slips, the vendors are watching to see if they're still getting paid. Most deals include a transition period where the old owner sticks around for a stretch to introduce you and hand off what's in their head. Use every day of it.
The honest version: I've been inside a post-acquisition where a wave of new operators rolled in and changed everything at once, and it was a complete shit show. The damage doesn't show up in the LOI or the QoE. It shows up in month 4 when the best employee quits and takes the account that was 30% of revenue with them.
Who's involved: you, the outgoing owner, the team you inherited, and the customers and vendors you're now responsible for not losing.
The gate: there's no next stage — this is the business now. The gate is just whether revenue and the team are intact 90 days in. If they are, you did the hard part right.
The whole timeline, in one breath
Stack it all up and the typical path looks like this: a few weeks to write your buy box, then the long open-ended grind of sourcing, then days-per-deal screening as things flow in, a week or two to value the survivor, a week or two to agree an LOI, and then a roughly 60-to-90-day stretch where financing and diligence run side by side, ending in a 2-to-4-week closing. Six to twelve months, with sourcing and diligence eating most of it.
Most people only ever do stages 4 through 8 — they find one deal they like, fall for it, and try to make the math work backwards. The buyers who actually close good deals spend their real time on stage 2, see a lot of deals, and stay willing to walk at stage 7. The process isn't the hard part once you can see the whole shape of it. The hard part is having enough deals in front of you that you don't have to force the wrong one.
That's the part I'm trying to fix. Everything from stage 4 on, you can do with an accountant and a lawyer. Stage 2 — actually seeing enough real deals, on-market and off — is where most people stall out before they ever get to the rest. Start there.
DealStratum helps you find and source a business to buy — on-market and off. It's not a broker, a lender, or a financial advisor. Nothing here is investment or financial advice.
Sources
- Small-business acquisition timeline (6-12 months overview)
- Stanford GSB — 2024 Search Fund Study (search-phase duration)
- BizBuySell 2024 Insight Report — median price, multiple, days on market (via Small Business Trends)
- Live Oak Bank — financing an acquisition with an SBA 7(a) loan (LOI-to-close timeline)
- DueDilio — financial due diligence for business buyers (QoE duration)
- EBIT Community — Quality of Earnings reports for small-business acquisitions (cost)
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