Start, buy or join?

The rest of this course covers starting from scratch.

When you buy, you mostly pay for customers and earnings. The equipment is the easy part to price. Check five things before you sign:

1. Records. Three years of tax returns, the bank statements behind them, and sales by customer. Buyers and lenders can count only the income the records show.
2. Liabilities. Unpaid taxes, liens, lawsuits, equipment loans, supplier bills, deposits taken for jobs not yet done, and warranty promises to past customers. Buying the company itself, or only its equipment and customer list, changes which of these come with it. Ask your attorney before you sign.
3. Equipment condition. Have a mechanic check the truck, trailer and every machine: hours, maintenance records, pumps, burners, hoses, tires and brakes. Price it at what the same used gear costs elsewhere.
4. Seller dependence. Find out who customers call and why they stay. If the seller's cell phone is the business, get introductions, a transition period and a non-compete in writing. M&A advisers say to keep any one customer under roughly 10%–15% of sales. If one HOA is a third of the route, losing it changes the deal.
5. Working capital. You need money to run until the first customers pay: materials, fuel, insurance, any payroll. Agree in writing what cash, receivables and materials on hand come with the sale.

Ask why the owner is selling. Retiring is one reason. A big customer about to leave is another.

Buying usually takes more cash than starting. In BizBuySell's Q2 2026 report, service businesses sold through its marketplace had a median price of about $350,000. Most buyers expect to borrow: 78% planned on SBA loans and 90% expected some seller financing, while 29% of sellers planned to offer it.

Under current SBA rules, as lenders summarize them:

• A first-time buyer puts in equity of at least 10% of the total project (the price plus other costs in the loan request), and it can't be waived. Up to half can be a seller note on full standby, which means no payments to the seller for the life of the SBA loan.
• The business's own history has to show at least $1.25 of cash flow for every $1 of loan payments.
• Every change of ownership needs a business valuation. If the price is higher, the buyer covers the gap with more equity.
• Owners of 20% or more generally guarantee the loan personally, and loans over $50,000 generally need collateral.
• Since March 1, 2026, every owner, and any required guarantor, must be a U.S. citizen or national whose main home is in the U.S. or its territories. Lawful permanent residents no longer qualify as owners.

Example (made-up numbers): on a $200,000 project, 10% is $20,000. The seller could carry up to $10,000 of that on standby, so the buyer still brings at least $10,000 in cash. Run any loan through the five Borrowing Rules (B100.5) first.

• Work for a good contractor. Ask to learn estimating, scheduling and the books along with the rig.
• Subcontract. An established contractor brings the customers; you bring the labor and often the equipment. If they set your hours, supply the equipment and pay you by the hour all season, the IRS's tests point toward employee, whatever form you're handed.
• Partner. Put it in writing before money changes hands: who puts in what, who decides what, how owners get paid, and what happens on a partner's death, disability, departure or a deadlock, including how the business gets valued.

• SBA: Buy an existing business or franchise
• Small Business Development Centers: free advising, including help looking over a deal
• SCORE: free mentoring
• SBA Lender Match: find lenders that make SBA loans