First-time buyers often believe that the hard part of an acquisition is finding the right business.
Clean numbers. Strong margins. Perfect systems. No risk.
That expectation is what breaks searches.
Below $5M in revenue or EBITDA, every business has flaws. There are no exceptions. Owner dependence, messy financials, customer concentration, deferred maintenance, or uneven growth always show up somewhere. The goal is not to eliminate problems. The goal is to choose problems you can survive and fix.
Why Searches Take Longer Than Expected
The average timeline to close a first deal is not six months. It is closer to 18 months. That is not a failure. That is normal.
People who try to force a faster outcome usually disappear. They rush underwriting. They compromise on risk. They tie personally guaranteed debt to a business they do not fully understand. That is how bankruptcies happen.
What actually works is slow compression, not speed for speed’s sake.
What a “Good” First Deal Actually Looks Like
Your first deal is almost always your worst deal. That does not mean it should be bad enough to ruin you.
A survivable first deal usually looks like this:
- Sub-$5M business with visible flaws
- Earnings based on historical results, not projections
- Problems you can clearly explain and model
- Downside that does not threaten personal solvency
- Upside driven by execution, not hope
If a deal only works because 2026 projections say it will, kill it. Basing earnings on future assumptions two weeks into the year is a red flag, not a strategy.
Kill Deals Faster, Not Slower
One of the biggest advantages experienced searchers have is speed of rejection.
Reviewing and killing 30+ deals in a year is not wasted effort. It is how pattern recognition is built. What took weeks early on should eventually take minutes.
Common reasons deals get killed quickly:
- Earnings propped up by aggressive projections
- Declining revenue without a defensible narrative
- Extreme owner dependence with no infrastructure
- Pricing that assumes zero risk
- “Hope and growth” used as justification for valuation
The faster you kill bad deals, the more capacity you have for the few that matter.
Why Local Relationships Beat Perfect Numbers
In small and mid-sized markets, the best deals are rarely sourced by automation.
They come from people.
Chambers of Commerce. Rotary Clubs. Local charities. Lenders. CPAs. Operators. These are the connectors who hear about businesses before they ever hit a broker’s inbox.
Sellers care about more than price. Especially at the $1–2M level.
A 3–5% haircut on a $1–2M deal is often acceptable if the buyer is local, trusted, and committed to taking care of employees and customers. That same haircut on a $10M deal is material. At smaller deal sizes, relationships matter more.
If a seller knows you, you get a look. If they trust you, you get a shot.
Tip: surrounding yourself with the right people, before and after an acquisition, is a cheat code.
Perfection Is the Wrong Target
Perfection feels safe. It is also paralyzing.
The real objective is progress with discipline.
A good deal is not flawless. A good deal is one where:
- The risks are visible
- The downside will not break you
- The problems are operational, not existential
- The upside comes from work, not miracles
If you are waiting for a business with no flaws, you are not being cautious. You are avoiding the real work of ownership.
There is no perfect deal.
There are only deals with problems you are equipped to solve.
