The complete roadmap to buying your first business

Every step from zero to closing day

Author

Ben Kelly
August 12, 2025

I'm about to walk you through the exact step-by-step system I've used to acquire businesses with little to zero money down.

Hundreds of students have acquired their first business using this same system…

And today, you’ll get the same roadmap to take all the guesswork out of buying a business.

First up…

Step 1: Learn to identify good businesses

Before looking at any listings, you need to focus on businesses with three key traits:

Recurring revenue: Customers pay multiple times per year (think monthly services, not one-time purchases)

Recession resistance: Essential services people need regardless of the economy (if you lost your job tomorrow, what would you still pay for?)

Barrier to entry: Hard for competitors to start (requires licenses, capital, or prime locations that aren't available)

Also, you want to shoot for the “golden ratio”: 15-35% profit margins. This tells you the business is well-managed with good systems in place.

Step 2: Get pre-qualified with an SBA lender

Bring your last three years of tax returns, pay stubs, and personal financial statements. A lender will tell you exactly how much you can spend.

A good rule of thumb?

For a $1M business, you need at least $300K in cash flow to qualify for the loan.

Step 3: Fill your pipeline (this is a numbers game)

You need to look at 20-30 businesses to make 2-3 solid offers.

On-market: Use smbmarket.com to filter for 15-35% margin businesses in boring industries (HVAC, plumbing, accounting).

Off-market: Cold email business owners using Apollo.io or LinkedIn with a simple script explaining who you are and why you want to buy businesses.

Step 4: Evaluate quickly

Apply the golden ratio test first.

Then, make sure the business meets the three criteria I shared in step 1.

Next, calculate value using 2-4x cash flow (owner-dependent = 2x, management-run = 4x).

Red flags to watch out for:

  • Declining revenue

  • Any single customer over 10% of revenue

  • Personal expenses mixed with business

Step 5: Make strategic offers

Start 15-20% below the asking price for normal deals.

If there’s a lot of competition, go at market value.

Additionally, you’ll want to create LOIs for every business you want.

Try these structures:

  • 85% SBA + 10% seller note + 5% you/investor

  • 90% SBA + 10% investor

And don’t be afraid to submit multiple LOIs!

Most get rejected - that’s totally normal. (Remember, this is a numbers game!)

Step 6: Verify everything (due diligence)

Once accepted, you have 30-60 days to confirm what the seller told you is true.

Review 3 years of financials, audit management structure, meet key employees, check customer contracts, and if you find problems…

Renegotiate the price.

Step 7: Close the deal

Once due diligence is complete, you'll work with your SBA lender to finalize the loan package.

This involves a lot of paperwork and document requests (totally normal for SBA deals).

You’ll also have a lawyer draft the purchase agreement based on your LOI terms.

From start to finish, SBA loans typically take 60-90 days. Schedule your closing about 30-45 days after due diligence wraps up.

On closing day, the funds transfer and you get the keys to your new business!

One final thought…

This system works, but only if you follow it methodically.

Most people skip steps or give up too early.

If you want to succeed…

Take this acquisition process seriously.

By the way…

I occasionally share acquisition opportunities with subscribers who are ready to follow this roadmap step-by-step.

So, if you're serious about buying your first business in 2025, fill out this quick survey:

Or if you're looking to sell your business:

Onward,

— Ben Kelly