Anyone have experience buying smaller companies ($350-$750k of cash flow)?

searcher profile

October 29, 2020

by a searcher from Indiana University at Bloomington in St. Louis, MO, USA

Exploring the self-funded route and personally like the idea of starting smaller with something in the $350k-$750k of cash flow range instead of going for the home run on my first at-bat.

Would love to talk to others who have experience with this to discuss the different risk profile relative to $1M+ EBITDA businesses.

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commentor profile
Reply by a searcher
from The University of Georgia in Atlanta, GA, USA
I'm in the process of closing a deal in this size range and have found many benefits. Assuming you plan to inject a decent portion of your own funds, the biggest benefit I have seen is that less additional equity is required. Thus allowing you to retain all (or almost all) of the outstanding ownership. It also reduces the need to manage multiple equity holders and instead focus your attention on the deal/business.
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Reply by an intermediary
from Indiana University at Bloomington in Carmel, IN, USA
I have been representing buyers, many searchfunder type clients, exclusively for in this space for over 15 years, $350K to $1.5mm. Multiples are reasonable, we are always the only one in the as they are not listed with a broker or on the Internet. Lots of financing options, especially with the SBA (There are more and better SBA spifs in the new Stimulus bill, when/if it ever gets passed). If I can help you or anyone, feel free to contact me. redacted
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