The Costs of Searching

Latest Revision: February 7, 2022

One of the key decisions in buying a business is how to pay your bills while you are searching for it. You will have search expenses, living expenses and perhaps some substantial personal debt to take care of. Having investors pay your salary and expenses for two years while you search is a solution if you follow the "traditional funding" route, but may not be feasible if you have geographic restrictions or cannot relocate. If you decide to self-fund your search expenses, it is even more critical to understand the potential costs you will be facing as you move through the process and get to a final closing. Being "thrifty" and "frugal" are important skills for an EtA Searcher/CEO!

16 searcher/CEO's, funded and self-funded, shared data on their search process costs. Each search was different and there was a huge range from $49K to $897K for all in-costs by the time closing arrived. The average cost for a funded-searcher, excluding salary and the back-end deal expenses for legal costs, was $98K while self-funded searchers were $47K, who are more geographically constrained with lower travel costs.

Costs in the search process

Most searchers reported minor startup costs that included business cards, domain name registration, incorporation papers to be an average $2,800 and a low of $250. A few reported higher costs because they held foreign passports, with the highest cost reported at $15,000 to kick off their search.

You can read more in my blog post here: https://jimsteinsharpe.com/contemplating/cost-of-searching/

Please let the community know your thoughts and comments below!

Search On!!!

Jim Sharpe