Buy Then Build

The math is surprisingly accessible. SBA-backed loans cover up to 90% of the purchase price, using the business's own assets as collateral. The average US startup launches with $65,000 in capital — roughly the same as an average home down payment. That same $65K, paired with a 90% SBA loan, buys a company at around $650,000. At a 3x earnings multiple, that yields about $216,000 in annual Seller Discretionary Earnings from a business generating over $1.4 million in revenue — placing you in the top 4% of US companies by size.

Unlike venture capital, bank financing doesn't require surrendering equity. You keep full ownership. The structure looks more like buying a house than launching a moonshot, with monthly debt payments covered by the company's existing cash flow.

The demographics are staggering. Baby boomers owned 12 million small businesses as of 2013 — 43% of all US small businesses. They began retiring at 9,000 per day, accelerating to 11,000 daily. By 2029, roughly 77 million people will have retired, and an estimated $10 trillion in existing business value must change hands.

This creates unprecedented opportunity. Established, profitable businesses with decades of operational history will flood the market at the most affordable levels ever experienced. Many operate on legacy systems, lack modern marketing, and have never optimized their operations — precisely the gaps an acquisition entrepreneur is equipped to fill. The infrastructure built by prior generations is available for purchase, often below what it would cost to replicate from scratch.

Deibel's Law of Three As is a self-assessment framework that must precede any deal search:
1. Attitude — cultivate a growth mindset, the top predictor of entrepreneurial success per Carol Dweck's Stanford research
2. Aptitude — honestly inventory strengths and weaknesses (hire a professional assessor; research shows most people overrate themselves)
3. Action — define what you want your daily work to actually look like: sales calls, operations management, digital marketing?

Most buyers skip straight to browsing listings and never define what success looks like personally. They drift for months or years without clarity. The Three As ensure you know where you'll thrive — so when the right company appears, you recognize it instantly rather than endlessly tire-kicking.

Revenue is a vanity metric when shopping for a business. A $2M company with 5% margins and a $1M company with 35% margins have wildly different values. Deibel insists on defining targets by Seller Discretionary Earnings — the total pretax cash flow the owner enjoys — because that's what you're actually buying.

Build a target statement combining four elements: industry type (product, distribution, or service), the specific growth opportunity your skills unlock, an SDE range you can afford, and any geographic limiters. Deibel identifies four Acquisition Opportunity Profiles — Eternally Profitable, Turnaround, High Growth, and Platform — with Platform being the most common: a solid business whose specific growth gap matches your specific skillset.

Online listing sites are downstream. Good businesses get shown first to vetted buyers in brokers' private networks. Only after nobody bites do listings hit sites like BizBuySell. Deibel's strategy: meet every intermediary in your area, present your target statement, demonstrate you have financing access, and commit to buying within six months. This conviction is rare, and brokers will prioritize you over less-prepared buyers.

Remember that every business is for sale. Deibel has proactively contacted companies he admired — from eCommerce firms to century-old factories — and reports every single prospect was willing to talk. Recruit a broker to approach targets on your behalf, or reach out directly and introduce a broker once interest develops. Treat your search like a networking campaign, not online window shopping.

Most buyers get this backwards. They arrive suspicious, arms crossed, expecting a sales pitch — behaving like conservative investors looking for reasons to say no. Deibel treats the first seller meeting like a job interview where he's applying to be CEO of their company. He thanks the seller, compliments specific aspects of their business, shares his background and financing readiness, and demonstrates genuine passion for the opportunity.

This approach wins on three levels. The seller sees you can close, that you're competent to steward their life's work, and that you're a trustworthy partner. Negotiate everything except price before the formal offer — identify what matters to the seller beyond money (employee retention, closing speed, legacy), then give those easy wins freely. Save financial scrutiny for due diligence.

Ignore the asking price initially. Calculate your own valuation using a weighted average of the last three years' Seller Discretionary Earnings multiplied by a fair multiple — typically 2.5 – 4x for companies under $5M in transaction value. Weight recent performance more heavily: 70% for the most recent year, 30% prior, 10% third year back.

Then stress test the deal. Subtract annual loan payments from SDE, add your minimum salary, and calculate how much revenue must decline before you're in trouble. In Deibel's example, a $400K SDE company financed at 90% could survive a 37% revenue drop before debt became unserviceable. Your future growth is pure upside — never pay for potential you haven't yet created. A $94K initial investment at these terms can compound to over $5.7 million in total pretax returns over eleven years.

Day one starts with an all-hands meeting where the seller introduces you and exits the stage — ideally for the last time in a leadership role. Immediately address employee fears: are there layoffs? Benefit changes? If the answer is no, say so plainly. Under-promise and over-deliver. Then spend month one in one-on-one meetings with every employee, riding along with salespeople, and visiting top customers and suppliers to build a feedback loop.

Month two, learn the machinery. Map how orders flow through the company, document undocumented processes, build a 13-week cash flow projection, and identify single points of failure. Get the seller out quickly — their emotional connection evaporates once money hits their account. Month three, begin implementing your growth plan with the credibility earned by listening first.