Buying a Business — Step by Step

Banks generally expect an equity ratio of 20 to 30 percent of the purchase price. A seller’s loan counts toward this ratio, so your own contribution can be smaller: For example, with a 20 percent ratio, you contribute 10 percent yourself and cover 10 percent with a seller’s loan. You finance the remaining purchase price through bank loans and government grants. In addition, there are incidental costs for a lawyer, tax advisor, property inspection, and notary totaling about 5 to 8 percent, which you must cover separately.

Module: Search Strategy and Buyer Profile

Acquisition financing typically combines equity, a bank loan, and, if applicable, government grants, often supplemented by a seller loan. A separate module covers how to use these elements to create a robust financing plan and prepare for your meeting with the bank.

Module: Acquisition Financing

In a share deal, you purchase the company’s shares; the company continues to exist as a legal entity, and contracts, licenses, and permits remain in effect. In an asset deal, you purchase individual assets such as machinery, inventory, or a customer base, and you choose which assets to acquire. The trade-off: Contracts must be renegotiated or transferred. For purchase prices in the low six-figure range, asset deals are more common because they do not involve any unknown legacy liabilities.

Module: Transaction Process and Deal Structures

With a seller’s loan, the seller defers a portion of the purchase price—typically 10 to 30 percent—with repayment spread over 2 to 5 years. With an earn-out, a portion of the purchase price is tied to the company’s future performance—typically 10 to 30 percent, payable over 1 to 3 years. Both are risk-sharing instruments and are common in smaller transactions because they bridge the gap between equity and bank loans.

Module: Transaction Process and Deal Structures

For transactions under approximately 2 million euros, the review conducted with a tax advisor and attorney focuses on the key issues in the areas of finance, tax, and law: What is the sustainable, adjusted earnings figure? Are the annual financial statements accurately prepared? Are there any tax risks? Were previous share transfers valid? What do the contracts and customer structure look like? For larger transactions, the reviews are more comprehensive: IT, tech, operations, commercial, AI, insurance, ESG, and more.

Module: Mastering Due Diligence

It typically takes 6 to 18 months from the initial search to the final closing. Most buyers underestimate the search phase. Those who buy under time pressure end up compromising on quality, so it’s worth starting early and reviewing a wide range of companies to refine your search criteria.

Module: Search Strategy and Buyer Profile

For initial contact, a resume and a brief personal statement are usually sufficient. After signing the confidentiality agreement and before the LOI, proof of equity is expected; as soon as things get more concrete, a preliminary financing commitment from the bank strengthens your position. Sales consultants screen prospective buyers based on whether they can actually finance the purchase.

Checklist: Documents You'll Need as a Prospective Buyer

The DUB Buyer Academy is a free self-study program that prepares prospective buyers, step by step, for the process of acquiring a business. It consists of 9 modules across 5 phases, ranging from search strategy to valuation, due diligence, and financing, all the way to the 100-day plan following the acquisition. Each module takes 12 to 15 minutes to complete; together, they take about 2 hours.

Yes. All modules, the Deal Readiness Check, and all templates and checklists from the DUB Buyer Academy are available free of charge. The reason for this is the wave of succession planning among German small and medium-sized businesses: smaller companies, in particular, are often sold without the help of a sales consultant. Making this knowledge freely available is intended to simplify such transactions and provide greater certainty for both parties.

The Buyer Academy provides 15 documents, including a buyer profile template, a checklist of the documents you’ll need as a prospective buyer, a comparison of share deals and asset deals, a valuation template, and checklists for reviewing teasers, non-disclosure agreements, and company profiles.

The Deal Readiness Check is a self-assessment that takes about ten minutes to complete. It tests your knowledge of the entire purchasing process and provides you with a personalized assessment of whether you're ready. You can take it independently of the individual modules.

Start the Deal Readiness Check

Yes, in addition to the Buyer Academy, there is the Seller Academy—a separate program for business owners who want to sell their companies. It consists of 10 modules across 4 phases, from initial preparation through the handover following the sale.

About the Sales Academy