Who’s Buying Your Business—and How Are They Paying? Understanding Today’s Exit Landscape

One of the most overlooked aspects of building a business that’s truly sellable is understanding the buyer. Who is buying businesses right now? What do they want? And—critically—how are they planning to pay for yours?

In this episode of Freedom To Exit, Lani Dickinson breaks down the three primary types of business buyers and reveals what you need to know to make your business an ideal target—while protecting yourself in the process.

Why Understanding Buyers Matters

Before you can build a business someone wants to buy, you need to understand what motivates them. If you know how each buyer thinks, what they’re looking for, and how they’ll structure the deal, you can reverse-engineer your business to match—and massively increase your exit success.

Spoiler alert: most small businesses aren’t built this way. That’s why only 1 in 5 actually sell.

Buyer Type #1: Individuals Looking for Cash Flow (Not Jobs)

Individual buyers today are being trained online to buy businesses with “no money down,” keeping the original owner on as an employee while using the company’s existing cash flow to pay the acquisition debt.

This only works because most businesses are not built to be sellable.

These individuals are:

• Not looking to work in the business

• Want absentee or hands-off ownership

• Seek cash flow and scalability

• Often fund the deal through SBA loans or seller financing

To make your business attractive to this buyer:

• Build a self-running operation

• Ensure predictable cash flow

• Be prepared to discuss earn-outs or seller financing

• Understand that real estate can play a role in deal structure

Buyer Type #2: Strategic Companies Acquiring for Growth

This buyer is another business—often a regional or local company—looking to:

• Expand market share

• Acquire your customer base

• Access proprietary technology, systems, or processes

• Increase profitability through efficiencies

They may also be executing a roll-up strategy, buying multiple similar businesses to eventually sell the larger, combined entity at a premium.

To attract this buyer:

• Highlight your customer base and process documentation

• Show how your business complements theirs

• Demonstrate your business’s growth potential and scalability

Buyer Type #3: Institutional Buyers (Private Equity Firms)

Private equity is responsible for 50% of all acquisition deals today, managing over $5 trillion in assets across roughly 6,000 firms.

These firms have one goal:
📈 Maximize returns for investors—pension funds, endowments, sovereign wealth, and high-net-worth individuals.

To do this, they need:

• EBITDA growth well beyond the stock market’s average 7% return

• A proven management team (they’re not bringing one)

• Scalable systems, recurring revenue, and strategic growth potential

• A growth plan that shows clear upward momentum

Private equity firms typically structure deals using:

• As little upfront cash as possible

• A large amount of debt (your business will be expected to service that debt)

• Earn-outs, seller financing, and second bites of the apple (which sound attractive, but come with risk)

Here’s the kicker: 73% of founder CEOs don’t last the full 5-year holding period after selling to private equity. The reason? They often struggle to make the hard decisions (team cuts, aggressive restructuring) required to meet profit targets.

How They Pay—and Why It Matters

Let’s break it down:

🧍 Individual Buyers:

• Use SBA loans (requiring 10% cash down)

• Often seek seller financing to lower their upfront investment

• May offer leaseback on real estate to reduce acquisition costs

• Want turnkey operations with little personal involvement

🏢 Strategic Buyers:

• Fund deals from existing business profits or bank financing

• Value synergies, customer access, and process improvements

• May integrate your team and systems into theirs

🏦 Private Equity:

• Use heavy leverage (e.g., 50% debt)

• Expect your cash flow to handle debt payments

• Require clean books, strong leadership, and exit-ready structure

• Focus on high ROI, regardless of your company’s legacy culture

Example:
A business with $5M EBITDA selling at a 10x multiple = $50M. PE may offer $25M cash + $25M debt. Your business must continue to generate profit to support that debt—after the sale.

Key Takeaways: Build With the End Buyer in Mind

Understanding who is buying and how they pay gives you the power to:

• Structure your business to match their expectations

• Avoid becoming a “job” in your own business after selling

• Protect your culture and cash-out terms

• Increase the odds of a successful—and satisfying—exit

You don’t have to fear seller financing or private equity—but you must be ready for the realities they bring. And the earlier you build your business to support those realities, the more freedom and options you’ll have at the exit table.

Free Resources to Go Further:

📌 7 Ways AI Can Boost Your Sales and Save You Time - Download this free guide:
👉 https://ai.activatetoascend.com/get-7ways-ai

📌 3 Ways Your Business Can Use AI TODAY to Stop Leaking Money – Save your seat for the free live webinar:👉 https://webinar.activatetoascend.com/webinar-register-general

📌 Changes Assessment – Discover where your business is leaking time, money, and momentum:👉https://stealthfreedomtoexit.com/changes