How to find a business worth buying

Finding a business worth buying is not a problem of luck, it is a problem of method. The buyer who succeeds does not stumble onto the right deal by chance. They have defined what they are looking for, made themselves visible to the right intermediaries, and learned to say no quickly to everything else. The buyer who waits for the perfect listing to appear almost always ends up overpaying for a mediocre company, simply because they are tired of searching. Search fatigue is the buyer’s first enemy, and the only defense is a process you hold to with discipline. I have watched capable buyers sign out of weariness after eighteen months of searching: fatigue, not price, had decided for them.

Start from your acquisition thesis, not from the listings

Before you look at a single target, write a one page statement of what you are looking for and why you are the right person to run it. An acquisition thesis is not a wish list, it is a filter. It has to be narrow enough to eliminate 95 percent of deals at a glance, and broad enough that a workable market remains. A buyer who says they want a profitable SME, any sector, anywhere in France, has no thesis. They have no criteria, and they will be buried under deals that do not fit.

• Size: set a revenue and EBITDA range, for example an EBITDA of 300k to 1m euros. Below that the company cannot pay a full time owner; above it you move into a different world of financing and competition.
• Sector and model: favor what you understand or can learn fast. Prefer recurring or contracted revenue, a diversified client base, and avoid models that depend entirely on the seller’s personal contacts.
• Geography: if you plan to run the business yourself, limit the radius to what you can reach in an hour or two by road. Proximity is underrated and changes everything in the first hundred days.
• Seller situation: a retirement with no successor is often the best entry point. Be wary of sales driven by a turning market or a single client about to walk away.

A good thesis also answers an awkward question: why would this business be available at a reasonable price? The best targets are not the most polished, they are the ones that are sound but that few buyers know how to see, because they are poorly presented, located away from the main centers, or run by an owner who cannot sell their own story. Your edge as a buyer is built there, on a segment where you are credible and where competition among buyers is thin.

Building deal flow: the channels that actually work

Once the thesis is set, the work is to see enough targets that the numbers swing in your favor. The rule of thumb is brutal: out of a hundred businesses identified, you might contact thirty, visit ten, make two or three offers and sign one. If you want to close a deal, you have to keep feeding the top of the funnel constantly, not wait passively.

• Intermediaries: M&A advisers, brokers, accountants and corporate lawyers see deals before the market does. Bring them a clear thesis and proof of funding; people call back the serious, precise buyer, not the tire kicker.
• Direct approach: the least crowded route. Build a list of companies that fit your thesis and write to owners near retirement, even with no listing. Most good acquisitions happen off market, before any public sale.
• Sector networks: trade associations, trade shows, suppliers and customers in a sector know who wants out before anyone else. A buyer known in their niche gets the first look.
• Platforms and listings: useful to calibrate the market and prices, but the most competitive channel. Use them to learn, rarely to buy.

The buyer who wins is not the one who sees the single best company, it is the one who sees the most. Target quality is a consequence of deal flow, not of luck.

The first filter: twenty minutes to say no

The most valuable skill a buyer has comes down to one thing: eliminating fast. Nobody runs due diligence on a hundred deals. You set aside ninety five of them in minutes, to reserve your energy for the five that deserve real work. In investment banking I learned to kill a deal in twenty minutes; on the buy side it is the same discipline that protects your time. Build a first screen that you apply to every deal at the first contact, before you even ask for detailed accounts.

• Client concentration: if the largest client is more than 25 percent of revenue, you are not buying a business, you are buying a relationship you do not control.
• Owner dependence: does the business run when the seller is away for three weeks, or does everything rest on them? A company that exists only through its boss is very hard to take over.
• Quality of earnings: a flattering EBITDA achieved by underinvesting or squeezing suppliers is not durable. Look for stable margins across several years, not one good year on its own.
• Price against cash flow: a headline multiple that implies debt service above what the cash flow can carry disqualifies the deal, however good it looks on the surface.

Take a concrete case. Two deals land the same week. The first shows 1.2m euros of revenue and an EBITDA of 250k, but 40 percent of revenue comes from a single client and the owner signs off every quote personally. The second shows a more modest EBITDA of 180k, around fifty recurring clients and a management layer already in place. The second is worth far more to you, even at a lower EBITDA, because the risk is diversified and the business survives your learning curve. The first filter has to surface that difference in minutes. Among the buyers I work with, this trade off between a higher EBITDA and concentrated risk comes up on almost every deal, and it is nearly always the second profile that pays off.

From shortlisted target to offer: do not skip the cash

A target that clears the first filter is not yet a good deal. It is a deal that earns a closer look, nothing more for now. Before any letter of intent, adjust EBITDA for private spending and a market rate owner salary, rebuild the cash flow genuinely available, and check that this flow supports the price you have in mind with a comfortable margin. That is exactly the logic set out in our guide on debt capacity before buying an SME or startup: price is not set by the multiple, it is set by what the cash flow can repay.

Finding a business worth buying, then, is not about watching for the right listing, it is about building a system: a narrow thesis, a maintained deal flow, a fast filter and disciplined financial analysis on the small number of targets that earn it. The buyer who holds to this process does not sign the first deal that turns up out of weariness; they sign the right one, at the right price, because they have seen enough to know the difference. If you are studying a target right now, have its repayment capacity modeled before you commit to a price.

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