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Free · Anonymous · ~10 minutes

SMB Investor Self-Assessment

Twenty questions for anyone thinking about buying or investing in a small business. They cover what you want out of it, how much risk you can carry, how much of yourself you can give it, and what kind of deal fits. Most people find the questions harder than they expected. That is the point.

No signup. No download. Nothing is scored. Your answers stay in this browser so you can come back to them, and you can print a copy when you finish.

How to use this

Answer honestly, not aspirationally. Nobody sees this. There is no right profile: a passive investor with a low loss tolerance and a hands-on operator who wants a turnaround are both fine, as long as each of them buys the deal that matches. Trouble starts when someone buys a deal built for the other person.

Skip anything you can't answer yet. A blank is useful information too.

Answers save in this browser automatically.

Section 1 of 5

What you want out of this

The reason you're buying shapes every later decision, from how much you borrow to how much of your week you hand over.

1. Why do you want to own a business?

A deal that makes sense for someone replacing a salary is often wrong for someone parking capital.

2. Which matters more to you: income now, growth later, or something that outlasts you?

Cash you pull out is cash the business can't reinvest. Pick the trade you can live with.

3. When do you want to close on something?

A deadline changes how you evaluate deals. People with a date tend to talk themselves into the one in front of them.

If your Tuesday has you on a job site at 7am, don't buy a business that needs a passive owner. If it has you on a boat, don't buy one that needs you on the job site.

Section 2 of 5

Risk and capital

Every buyer says they can handle risk until the first bad quarter. These questions ask what you would do, not how you feel.

5. How much of your investable net worth would this deal take, including any personal guarantee?

The share of your net worth at stake sets how much sleep you lose, which sets how well you make decisions when it counts.

6. If the business lost 30% of revenue in year one, what would you actually do?

It happens. A key customer leaves, a key employee leaves with them, a supplier folds. Your honest answer here tells you how much cushion the deal needs.

7. How do you feel about an SBA 7(a) loan with a personal guarantee, possibly secured by your house?

Most small-business acquisitions under $5M are financed this way. Leverage raises your return and your downside at the same time.

Your answer shows whether you have a bench (spouse, partner, banker, advisor) or whether you plan to carry it alone.

Section 3 of 5

Involvement and time

Small businesses are rarely as passive as the listing says. The question is how far from passive you can afford to be.

9. How many hours a week can you honestly give this, after everything else you already do?

Count the hours you actually have. Wishful hours don't count, and the business will take what it needs either way.

10. What role do you want in the business?

Owners drift toward operating even when they meant to stay out. Decide now, because the purchase price should reflect who is running it.

11. The general manager quits on a Friday. Could you run the business on Monday?

Key-person risk is the most common way a "passive" investment turns into a full-time job. Know your answer before you need it.

A day job, young kids, an aging parent, another company. These don't disappear when you close. The deal has to fit around them.

Section 4 of 5

Skills and fit

You don't need to be good at everything. You need to know which gaps you'll hire for and which ones you're pretending aren't there.

"From the inside" means you've worked in it, sold into it, or run something adjacent. Reading about it does not count.

14. Where are you strongest as an operator?

Buy a business whose biggest problem is the thing you're good at. That's the cheapest value creation there is.

15. Picture a crew of twelve technicians who liked the old owner and don't want a new boss. How does that sound?

Most SMBs are people businesses first. Managing a field crew, a shop floor or a front desk is a different skill from managing a spreadsheet.

16. Hand you a P&L, a balance sheet and a cash flow statement for a business you've never seen. What happens next?

You'll be reading these every month. If they're a foreign language, budget for a translator before you close, not after.

Section 5 of 5

Deal preferences and exit

Now that the earlier answers are in front of you, narrow the field. Every box you leave open is a deal you'll have to evaluate later.

17. What revenue range are you looking at?

Size changes everything: the buyer pool, the financing, the management depth, and how much of the owner's job you inherit.

18. Which kind of business do you want?

Turnarounds are priced cheap for a reason. Stable cash flow costs more for a reason. Your answers in sections 2 and 3 should point at one of these.

19. How far from home can the business be?

Distance is a proxy for how passive you're really planning to be. If it must run without you visiting, the management team is part of what you're buying.

20. How long do you plan to hold it, and how does it end?

The exit you have in mind decides what you should fix first. A buyer in year four cares about different things than your kids will in year twenty.

Printing opens your browser's print dialog. Save as PDF from there if you want a copy.

Want a second opinion on your answers?

Bring your printout to a 30-minute call with Chris and Taber. We'll tell you which deals fit the profile you just described, which ones to walk past, and what we'd look at first in diligence. No pitch deck.

Book the 30-minute call

Or read how our buy-side SMB advisory works before you book.

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What this is & what it isn't

This is a thinking tool. It does not score you, rank you, or recommend a deal, and it is not investment, legal or tax advice. The questions come from the conversations we have with buyers before an LOI, where the hardest problems usually trace back to a mismatch between the buyer and the business rather than to the numbers. Your answers never leave your browser: nothing is submitted, and clearing them removes them from this device. Before you commit capital, talk to a qualified advisor who has seen the actual financials. If you'd like that to be us, here is how buy-side advisory works.