Practical Tips for Buying a Main Street Business the Right Way
Objective:
To assist Buyers of Main Street–sized businesses in avoiding mistakes that fall far outside customary practice — and that could unintentionally jeopardize a great deal.
The Backdrop: Why “One-Size-Fits-All” Doesn’t Work in Business Acquisitions
Today’s business buyers are more sophisticated and informed than ever. They’re researching deals online, using AI tools, or hiring buy-side advisors for support. That’s great progress overall — but not all advice fits every transaction size.
Some of the strategies circulating online are meant for Middle Market acquisitions ($50M–$500M annual revenue) and simply don’t translate to Main Street–sized deals (up to $5M to $10M annual revenue).
What works for a corporate merger or private equity group often overcomplicates smaller acquisitions, alienates Sellers, and drives up costs and frustration for everyone involved.
If you’re buying a small business — a trades company, restaurant, or service business — following “big deal” advice can be counterproductive. Here’s how to stay aligned with what works in the Main Street market.
1. Act Decisively
In today’s competitive market, quality listings are limited and sell fast. Successful buyers review opportunities quickly, ask targeted questions, and move to offer within days or a couple of weeks.
As they say: the early bird gets the worm — and in small business acquisitions, that’s absolutely true.
2. Don’t Redline the NDA
Main Street Sellers receive dozens — sometimes hundreds — of NDAs. They use standardized forms to streamline the process.
Requesting changes or “markups” to the Non-Disclosure Agreement (NDA) can slow things down and signal inexperience. In this market, sign the standard NDA and move forward efficiently.
3. Provide a Personal Financial Statement (PFS) or Proof of Funds (POF)
Yes, it feels personal — but you’re asking for confidential business information in return.
An accurate Personal Financial Statement (PFS) or Proof of Funds (POF) builds trust and ensures you’re treated as a qualified buyer.
Submitting inflated or fake numbers to “get access” wastes time and could even be considered fraudulent. Remember: No PFS, No CIM.
4. Get SBA Pre-Qualified Before You Make an Offer
If you’re using financing, start with an SBA-preferred lender — ideally one already familiar with the business listing.
Pre-qualification confirms your buying power and prevents wasted effort later. In real estate, no agent shows homes without a pre-approval letter; in business brokerage, the same logic applies.
Cash buyers should submit Proof of Funds (such as a bank statement or investment account screenshot) with the NDA or offer.
This quick step reassures Sellers that your offer is legitimate, and you can perform.
5. Include a Resume or LinkedIn Profile
SBA lenders — and most Sellers — want to know you have relevant experience to operate the business successfully.
Attach a concise resume or LinkedIn link with your NDA or offer. If you’re using an SBA loan, confirm your experience with the lender beforehand to ensure eligibility.
6. Ask Only Questions That Support Your Offer Decision
Before submitting an offer, keep your questions focused on what’s necessary to decide whether to proceed — not full due diligence.
Requesting too many details too early leads to deal fatigue and can frustrate both the Broker and Seller. Once your offer is accepted, you’ll have plenty of time for deeper due diligence.
7. Use an Asset Purchase Agreement (APA), Not a Letter of Intent (LOI)
For Main Street acquisitions, make your offer using a formal Asset Purchase Agreement (APA) — such as the BBF-70 form from the Business Brokers of Florida.
While Letters of Intent (LOIs) are common in large, complex deals, in smaller transactions they can seem non-committal and delay progress.
Submitting an APA instead demonstrates seriousness and saves time and legal expense.
8. Don’t Expect Working Capital (WC) to Be Included
Unless the Confidential Information Memorandum (CIM) specifically states otherwise, working capital is not included in the purchase price of most Main Street deals.
Requesting WC as part of a near-full-price offer is often a deal breaker.
Instead, plan for WC through a line of credit or your own liquidity, coordinated with your lender and CPA.
9. You Can’t Buy a Business with “No Money Down”
Despite what some online sources claim, no-money-down business purchases are not realistic for small business acquisitions.
Sellers expect Buyers to have sufficient liquidity for:
- The earnest money deposit
- Down payment
- Post-closing cash reserves
While some Seller financing may be available or appropriate, it’s not a substitute for Buyer capital.
10. Put 5% of the Purchase Price in Escrow
Earnest money demonstrates commitment. In both real estate and business sales, a meaningful deposit — typically around 5% of the purchase price — signals that you’re serious.
Even if you’re making a “non-binding” offer, including a deposit strengthens your credibility, especially if you’re asking the Seller to remove the business from the market.
11. Be Open-Minded About Lender Selection
Not all lenders are equal. The lender largely controls timing, complexity, and closing success.
Work with lenders recommended by your Business Broker — those who have a proven record of closing SBA deals efficiently. Many already have the business pre-qualified, saving you valuable time and money.
12. Skip the QofE — Use Add-Back Tracing Instead
For Main Street deals (up to $5M to $10M revenue), a Quality of Earnings (QofE) analysis is excessive.
A QofE report takes 4–6+ weeks, costs thousands, and makes sense for middle-market transactions ($50M–$500M) — not SBA-financed small business acquisitions.
And while Buyers may be becoming more sophisticated, Sellers generally are still hardworking mom-and-pop operators who have never even heard of a QofE or have the expertise, time, or patience to respond to an out-sized due diligence request list.
Instead, use Add-Back Tracing (ABT), a faster, cost-effective method to verify the Seller’s stated cash flow.
13. Buyer meetings with Customers
Buyers occasionally request to meet customers and rank-and-file employees before closing. However, maintaining confidentiality is a cornerstone of successful business sales, as premature disclosure can negatively affect ongoing operations and profitability.
This confidentiality is especially critical in the common situation where a transaction does not close. Early introductions to customers, employees, or landlords can inadvertently compromise the business’s stability and value—potentially harming both the current owner and the prospective buyer.
Final Thoughts: Keep It Simple, Professional, and Customary
There’s more business-buying advice online today than ever — and some of it simply doesn’t fit Main Street reality.
By staying close to customary market practices, you’ll save time, minimize costs, and earn the Seller’s confidence.
Buying a small business is both an art and a process. Acting decisively, respecting established norms, and approaching negotiations with professionalism will position you as a serious Buyer — and help get your deal successfully to the closing table.
About the Author
Written by Don B. Imbus, a Certified Business Intermediary® helping entrepreneurs buy and sell Main Street–sized businesses throughout the West and Southwest Gulf Coast areas of Florida. With experience in SBA transactions and small business valuations, Don B. Imbus helps Buyers make confident, informed acquisition decisions.
