How do you set acquisition criteria (a buy box)?

What goes in a buy box?

Seven lines, each specific enough that a broker could say yes or no to a listing in under a minute.

1. Industry. Two or three named industries, not "service businesses." Say why you can run them.
2. Geography. A drive-time radius or named metro areas. You will be on site often in year one.
3. Size. A range of seller's discretionary earnings (SDE) or EBITDA, and the matching price range. Above roughly $1M of earnings, buyers switch from SDE to EBITDA, and multiples rise.
4. Financing fit. The deal must work with the cash you have and the debt a lender will offer: at least 10% equity injection for a first purchase, 1.25x debt coverage on historical cash flow, and a total 7(a) limit of $5 million per borrower including affiliates.
5. Your role. Will you replace the owner day to day, or do you need a business with a manager in place? This changes the size floor more than anything else.
6. Business quality. Minimum years in business, recurring or repeat revenue, no single customer above a limit you set, and stable or growing revenue for three years.
7. Deal-breakers. Things that end the conversation: a license you cannot obtain or hire, a lease that ends before the loan, books that cannot be verified, or a seller who insists on terms the SBA prohibits, such as an earnout.

How do you choose the industry?

Pick industries where three things overlap: you can manage the work, lenders understand the business, and the price is reasonable for the risk. BizBuySell data from 2021 to Q1 2026 shows how widely prices differ by industry: car washes averaged 4.99x SDE, laundromats 3.65x, e-commerce 3.43x, HVAC 2.79x, restaurants 2.15x and hair salons 2.04x. A low multiple usually reflects higher risk, not a bargain.

Also check who else is buying. In HVAC, PKF O'Connor Davies counted 25 deals in the first half of 2026, of which 14 were private equity add-ons. Carta data shows private equity add-ons in HVAC are roughly four times as common as platform deals. Competing with funded buyers is possible, but expect sharper pricing for the best companies. See which "boring" businesses are worth buying for a longer look.

Worked example: setting the size range from your own numbers

Assume you have $250,000 in liquid savings and will pay yourself $100,000 a year. The rate and rules are as of October 2026; the other inputs are illustrative.

1. Keep $50,000 as a personal reserve. That leaves $200,000 for the deal.
2. Assume working capital, fees and closing costs add 10% to the price. Project cost = 1.10 × price.
3. Minimum injection = 10% of project cost = 11% of price. Maximum price = $200,000 ÷ 0.11 ≈ $1.8 million.
4. At 2.7x SDE, the Q1 2026 BizBuySell average, $1.8 million buys about $670,000 of SDE. That is your ceiling.
5. For the floor: the loan is about 99% of price (project cost minus injection). At 10% over 10 years (prime of 7% plus 3%; check current prime), annual payments are about 15.9% of the loan, or 15.7% of price.
6. Lenders want cash flow after your salary to cover payments 1.25 times. 1.25 × 15.7% = about 19.6% of price, which at 2.7x is about 53% of SDE.
7. So SDE minus $100,000 must be at least 53% of SDE. SDE must be at least $100,000 ÷ 0.47 ≈ $213,000.
8. Buy box size: roughly $215,000 to $670,000 of SDE, $575,000 to $1.8 million of price.

Run the same arithmetic with your own salary and the multiple for your chosen industry. If you need to hire a manager instead of running the business yourself, add the manager's pay to the salary line and the floor rises sharply.

If you plan to buy more than one business

Most buy boxes are written for a single purchase. If you might buy a second and third business, add a second set of questions. They make the first purchase a platform rather than a job.

• Are there add-ons? The industry should have many smaller owners in your region who could sell to you later.
• Can it carry overhead? A first business with a bookkeeper, a manager and clean reporting can absorb another company. One where the owner does everything cannot.
• Is there a multiple gap? GF Data's 2024 medians were 4.5x EBITDA for companies worth $1–10 million and 6.5x for $10–100 million. A group of small companies, well run together, may be valued at the higher range. That spread is the reason holding companies exist. It is not guaranteed, and overpaying or failing to integrate erases it.
• Will the books stand up to an audit? If a public listing is ever possible, every company you buy will need financials an auditor can work with.

See whether a business is a platform or just a business.

Where these numbers come from: industry multiples, the Q1 2026 average and the SDE-to-EBITDA switch are BizBuySell data compiled by Beancount. Injection, coverage, loan-cap and earnout rules are from SBA SOP 50 10 8.1, summarized by Cantrell Firm and Beancount. The maximum rate is from NerdWallet. HVAC deal counts are from PKF O'Connor Davies and Carta. Size-based multiples are GF Data figures via Carry and Conquer. SOP 50 10 8.1 applies to loans that receive an SBA loan number on or after October 1, 2026 (SBA Information Notice 5000-880695).

Related questions

How narrow should a buy box be?

Narrow enough that a broker can match a listing to it, and wide enough that the market contains dozens of candidates. One industry in one small town is too narrow. "Any profitable business in the Southeast" is too wide.

Should I share my buy box with brokers?

Yes. Send it as a one-page summary with your financing status. Brokers send deals to buyers who tell them clearly what they want and can close.

Can I change my buy box during the search?

Yes, but change it deliberately and in writing, not one exciting listing at a time. Review it every 60 to 90 days against what you have actually seen.

Where does customer concentration fit?

Set your own limit and write it down, because a large customer can leave the day after closing. See how much customer concentration is too much.

What comes next

With a buy box in hand, the next question is how many businesses you need to look at before you buy one.

Related articles

• Where do you find good businesses for sale?
• How many businesses do you need to look at before you buy one?
• How much should I pay for a business?
• How much will a bank lend to buy a business?
• How do you build a holding company for acquisitions?

Meraki Dealmakers is a service of Meraki Partners, LLC, an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm. This article is general information, not legal, tax or investment advice.