What Do Buyers Look for When They Buy a $5M to $20M Business?
By Ed Weeks Jr., MBA, CM&AA, Weeks Consulting Group
Last updated: October 16, 2026
Buyers want earnings they can verify, revenue that repeats, and a business that runs without you. Private equity firms, strategic acquirers, search funds and individual buyers all test those same three things. They just weigh them differently.
Owners tell me they’re above their business. No. Almost no one is. Everybody’s in the middle of it. Even on calls, people are jumping on their phones. If you can’t spend 20 minutes on a call without grabbing your phone, you are not above your business, and a buyer will see that first.
Who buys a $5M to $20M business?
What do private equity firms and search funds want?
PE firms and search funds are professional acquirers. They’re looking for platform investments (to grow through acquisitions) or add-ons (to bolt onto existing portfolio companies). They’re highly analytical, move quickly, and have clear investment criteria. They typically want businesses with recurring revenue, strong management teams, and a clear path to growth.
What do strategic buyers want?
A competitor or adjacent business buying yours to gain market share, acquire your team, enter a new geography, or add a product line. Strategic buyers often pay the highest multiples because they see synergies that financial buyers don’t. They’re less focused on standalone financials and more on what your business adds to theirs.
What do individual buyers want?
Experienced executives, entrepreneurs, or professionals looking to buy a business rather than build one. They want a business that can run operationally with their involvement, strong cash flow, and a seller willing to transition knowledge over time.
What will every buyer check in due diligence?
Regardless of buyer type, every serious acquirer will dig into the same areas: three to five years of financial statements and tax returns, customer concentration and contract terms, key employee retention and compensation, operational documentation and processes, technology and systems infrastructure, legal history and outstanding liabilities, and revenue quality (recurring vs. one-time, contracted vs. at-will).
What kills a deal?
The fastest way to scare off buyers: undisclosed liabilities discovered in due diligence, financial statements that don’t match bank deposits, owner who is the primary customer relationship for all major accounts, no management team below the owner, and revenue that’s been declining for 2+ years.
How do I make my business more attractive to buyers?
Start with documentation. Write down every process, every system and every key customer relationship. Build a management team, or at least one key employee who can carry operations. Reduce customer concentration by developing new accounts. And clean up your books, ideally with two to three years of reviewed or audited financials before you go to market.
For the price side, read how to value your business before selling.
Expect a deal this size to take time. The IBBA and M&A Source Market Pulse survey for the second quarter of 2026 found lower middle market deals averaging 11 to 12 months from engagement to close. Plan for that and you won’t make concessions you didn’t need to make.
Qualified buyers evaluating an acquisition can inquire directly about buy-side advisory support. Share your acquisition criteria and current deal stage.
Want to see where your business stands? Take the Business Optionality Assessment. It takes about 3 minutes: https://edweeksjr.com/assessment/
About the author
Ed Weeks Jr., MBA, CM&AA, Weeks Consulting Group. Ed advises owners of $2M to $20M businesses on growth, financing, M&A and exits.
