Buying a Small Business · LibraryProgress 0%VisitorAll tracks
Beta. Fictional teaching case. Saved on this device only. Beta build. The teaching business is fictional, case figures and model defaults are illustrative, and default loan terms are teaching defaults, not lending rules. Education only, not legal, tax, accounting or lending advice. Your work is saved in this browser on this device only.

Library

Look things up without following the course order. Search covers the lessons and this Library. Each entry points to the lesson that teaches it.

Glossary

Add-back
An expense the seller adds back to profit, claiming a new owner would not have it.
SDE
Seller's discretionary earnings: profit plus one working owner's pay and the add-backs that are supported. See L-301
School coverage
This school's teaching ratio: earnings after pay for the role, divided by annual loan payments. A lender may calculate coverage differently.
Equity injection
The cash a buyer must put into the deal. See L-121
Customer concentration
How much revenue depends on the largest customers.
Replacement labor
What it costs to pay someone for work the seller or family did unpaid.
Sources and uses
Every dollar the deal needs, and where each dollar comes from. See L-122

The ten acquisition tests

The ten acquisition tests are part of the Deal Lab, which is for members.

Four prices, never one

Seller askThe seller's proposal.
Indicative business valueA range implied by normalized earnings and an illustrative multiple range. It is not an appraisal.
Financeable priceThe most the stated financing can carry.
Buyer maximumThe most this buyer should pay. The buyer sets it; the tool caps it.

Sources

Every external fact in a lesson names its source, the date it was read and how many times it was read from the source.

SOP 50 10 8.1 Lender and Development Company Loan Programs with Technical Policy Updates (Appendix 15, Appendix 16, 17, 18; Section A)
U.S. Small Business Administration, Office of Capital Access. Read 2026-10-03. Read twice from the source. Used in L-101, L-112, L-121, L-122, L-123, L-301, BG-01.
13 CFR 120.160, 120.212, 120.214, 120.220 (eCFR, current as of 2026-10-01)
Electronic Code of Federal Regulations (Office of the Federal Register / GPO), data API. Read 2026-10-03. Read twice from the source. Used in L-101, L-121.
OEWS Profiles, May 2025 (national estimates by occupation)
U.S. Bureau of Labor Statistics. Read 2026-10-03. Read twice from the source. Used in L-102, L-113.
Technical Notes for May 2025 OEWS Estimates
U.S. Bureau of Labor Statistics. Read 2026-10-03. Read twice from the source. Used in L-102, L-113.
Employer Costs for Employee Compensation, June 2026 (news release summary)
U.S. Bureau of Labor Statistics. Read 2026-10-03. Read twice from the source. Used in L-102.
SOP 50 10 8 Technical Updates (prior version)
U.S. Small Business Administration. Read 2026-10-03. Read twice from the source. Used in L-112, BG-01.
Information Notice 5000-881797 7(a) Fees Effective October 1, 2026 for Fiscal Year 2027 and 90-Day Rule Clarification
U.S. Small Business Administration, Office of Capital Access. Read 2026-10-03. Read twice from the source. Used in L-122.
Self-employment tax (Social Security and Medicare taxes)
Internal Revenue Service (irs.gov). Read 2026-10-03. Read twice from the source. Used in L-301.
S corporation compensation and medical insurance issues
Internal Revenue Service (irs.gov). Read 2026-10-03. Read twice from the source. Used in L-301.
Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game (book site home page)
Buy Then Build (the author's site). Read 2026-10-03. Read twice from the source. Used in BG-01.

Educational use only. Not legal, tax, accounting, valuation or lending advice.

Buyer School is an independent educational website for learning about small-business acquisitions. Its lessons, examples, checklists, calculators and reports provide general information and illustrative planning estimates. They do not provide individualized legal, tax, accounting, investment, valuation or lending advice, and they do not determine SBA eligibility, financing approval or whether a particular business should be purchased. Using Buyer School does not create an advisory or other professional-client relationship. Buyer School is not affiliated with or endorsed by the U.S. Small Business Administration. Rules, fees, rates and lender practices can change; summaries may omit exceptions. Do not rely solely on Buyer School when evaluating, financing or purchasing a business. Before signing a letter of intent or other agreement, applying for financing, waiving a contingency or committing funds, review the current official SBA website at https://www.sba.gov, including the applicable SOP, program guidance and fee notices, and applicable IRS guidance at https://www.irs.gov, and obtain transaction-specific advice from an attorney licensed in the relevant jurisdiction, a CPA experienced in business acquisitions, and the participating lender. Consult other qualified professionals when the transaction requires them. The lender must confirm how current SBA requirements apply to the proposed financing, and licensing and permit requirements must be confirmed with the issuing authorities.

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