Tiny Acquisition Advice

June 16, 2025

by a searcher from Massachusetts Institute of Technology in Austin, TX, USA

Hi all - I am talking to an owner who runs a competitor to my business. His business is very small, and realistically I'd be buying the lead flow he has from his referrals based on many years in business and good online reviews. I'd love to hear anyone's thoughts on how you would structure a deal like this since I don't think a normal multiple really applies. Thanks!

0 Likes

18 Replies

213 Views

Replies

Reply by a searcher
from Rice University in Houston, TX, USA

Hi Moriel, one minor piece of advice here is that buying customers and not necessarily whole companies is pretty common in some industries - two being pool services (commonly called buying the "pool route") and yard/commercial maintenance. I'm far from an expert in how these transactions are typically structured (so I won't pretend to be), but I bet brokers / others in your network familiar with the sale of these types may provide some value with structure.

Reply by a searcher
from Massachusetts Institute of Technology in Captain Cook, HI, USA

I’ve heard one example on acquiring minds podcast where the buyer valued it by assuming 50% of the customer list becomes leads and then applying their cost per lead to the remainder. I’d think about what percentage to use if 50 doesn’t make sense. The viewing the rest as leads I think does make sense, and if you think there’ll concert into paying customers at a higher rate than normal adjust as needed. And if the resulting valuation is too low work up from there.

+16 more replies.

Join the discussion