Businesses for Sale: How to Find and Assess the Right Acquisition

The shorter route to entrepreneurship

There are two ways to become an entrepreneur. The first is starting from scratch: developing an idea, acquiring customers, building systems, making mistakes and learning from them. It is the romantic route, but also the slow and risky one.

The second way is taking over an existing business. You don't just buy a name and some inventory – you buy customers, turnover, employees, processes, a reputation. Everything the previous owner built up over years is yours in a single transaction.

But where do you find businesses for sale? And how do you know if what you are buying is worth the price? In this article, I will take you through the complete process, from searching to signing.

Where to look

The market for business acquisitions is less transparent than you might hope. Not every business that is for sale shouts it from the rooftops. Discretion is often required – owners do not want customers or employees to become unsettled.

Acquisition marketplaces are the most accessible source. Websites such as Brookz, Bizz Trade and the NVM Bedrijfsaanbod show hundreds of businesses actively seeking a buyer. The advantage is the breadth of the offering; the disadvantage is that you are competing with other interested parties.

Business real estate agents have access to a different segment. Many owners engage a specialist to sell more discreetly. These businesses are not listed online; you only gain access to them through the real estate agent's network. It costs a commission, but the quality of the offering is often higher.

Direct approach is the most proactive route. See a business that interests you? Contact the owner. Not every business that can be bought is listed for sale. Sometimes the owner is indeed open to a conversation, but has not yet taken the step. Your timing could be exactly right.

What makes a business worth buying?

Not every business for sale is a good buy. In fact: some businesses are for sale precisely because there are problems. How do you separate the wheat from the chaff?

Start with the reason for sale. An entrepreneur retiring after thirty years of building is a very different story to someone throwing in the towel after two years. Ask follow-up questions and listen critically to the answer.

Next, look at the dependencies. Is the turnover concentrated with one or two large customers? Then the risk is high. Is all the knowledge inside the owner's head? Then you are buying a problem. A healthy business has diversification in both customers and competencies.

And study the trend. Not just last year's figures, but the development over three to five years. Is the turnover growing? Are margins staying stable? Or do you see a declining line that the seller is trying to mask with optimistic stories?

The valuation

What is a business worth? It is the ultimate question, and the honest answer is: it depends.

The most commonly used method is the multiple on EBITDA. You take the earnings before interest, taxes, depreciation and amortisation, and multiply it by a factor. That factor varies per sector and per type of business: for small SMEs a multiple of 3 to 5 is common, for larger or fast-growing businesses it can rise to 7 or higher.

A business with an EBITDA of €200,000 and a multiple of 4 is therefore roughly worth €800,000. But this is a starting point, not a final destination. Adjustments are always necessary: for one-off costs or gains, for market-conforming salaries, for investments required in the short term.

Always seek assistance from a specialist. An accountant or corporate finance advisor can scrutinise the figures in a way most buyers cannot do themselves. You will earn back the costs of that advice twice over in a better deal.

The acquisition process step by step

Once you have found an interesting business, the real work begins. The process involves a number of fixed steps.

Step one: orientation. You receive an information memorandum and conduct exploratory talks. Is there a click with the seller? Does the business fit your plans? This is the phase of browsing without obligations.

Step two: indicative offer. If you are serious, you make an indicative offer. This is not yet binding, but indicates the price range you are thinking of. Based on this, the seller decides whether they want to proceed with you.

Step three: due diligence. This is where it gets exciting. You get access to all data: financial records, contracts, personnel files, legal documents. Your goal is to verify what you have been told and to discover hidden risks.

Step four: final negotiation. Based on your findings, you negotiate the final price and terms. Earn-outs, warranties, non-compete clauses – everything comes onto the table.

Step five: closing. The purchase agreement is signed, the purchase price transferred, the keys handed over. The business is yours.

The pitfalls

I would be giving you a false impression if I didn't warn you about the risks. Business acquisitions fail more often than they succeed, often due to avoidable mistakes.

The biggest mistake is falling in love with a business. You see what you want to see, ignore the red flags, and rationalise away the problems. A bit of healthy scepticism protects you against expensive errors.

A second mistake is underestimating what integration requires. Buying a business is one thing; running it is something else entirely. Employees who don't know you, customers who were loyal to the old owner, systems you don't understand. Plan for an intensive induction period.

And do not underestimate the financing. Banks are cautious with acquisition financing; you generally need 20 to 30 per cent of your own funds. Ensure your financing is arranged before you make serious offers.

The reward

With all those warnings, you might wonder: is it worth the effort? The answer is, for the right person and the right business: absolutely.

A successful acquisition gives you in one stroke what years of building would cost. Turnover, customers, a team, a reputation. It enables you to focus on growing instead of surviving. And for entrepreneurs who prefer improving over inventing, it is the perfect entry point.

Want to know more about selling a business or need advice for your search?