I talk with a lot of people in the ETA and one of the best questions I ask when someone is looking to buy a company is the following... "What makes you more interested in buying this operating company vs starting one from scratch?" This applies a lot less to companies that are over $10m because the answer is a bit more clear, you are buying something that is clearly a going concern... However, the question tends to lend itself much more to businesses that are doing less than $1m in profit/EBIDTA (always a bit careful with EBIDTA) Many times the answer comes down to access to capital or leverage more than anything else "I can buy a $3m business but I can't get $300k in startup capital" I am not saying this is the wrong answer for why to buy something, but I also don't necessarily think its the ideal answer If someone is open to buying a machine shop, a doggy daycare, a garage door repair company a travel agency and an accounting firm I usually offer advice of a bit more discretion and thinking about how they want to spend their days for the next 5 years I also counter-position, how much would it cost to build this from scratch? How long would it take? Is that a possibility? This is not the ethos of search funds, or ETA, but its a good question to ask yourself as you get close to closing a deal