Write a buy box you can actually screen against.
A written buy box is what lets you say no in an hour instead of a fortnight. Here are the seven axes, what each one costs you, and a template to copy.
What a buy box is, and what it is not
A buy box is not a wish list. A wish list describes the business you would love to own; a buy box describes the businesses you will spend time on. The difference shows up the first time something almost fits.
Its real function is refusal. A searcher without one ends up working whichever deal arrived most recently, because with no written standard every deal is arguable.
The seven axes, and what each one costs you
- Size. Revenue and earnings range. The floor is set by what you need to live on; the ceiling by what you can fund.
- Sector. Name what you will look at and what you will not. The point is the exclusion, not the inclusion.
- Geography. How far you will travel monthly, not how far you would move once.
- Margin and model. Recurring or one-off, contracted or repeat. This drives the multiple more than the sector does.
- Customer profile. Concentration limits. A business where one customer is 40% of revenue is a different asset.
- Owner involvement. How much of the business is in the owner's head, and how long they will stay.
- Hard exclusions. The things that end the conversation. Litigation, environmental exposure, a single supplier.
The template
Copy this, fill it in, and keep it to one page. A buy box you cannot hold in your head is not doing its job.
BUY BOX
Size revenue $____ to $____ , earnings $____ to $____
Sector will look at: ____________________________
will not: ____________________________
Geography within ____ of ____________
Model recurring / contracted / repeat / one-off
Margin gross above ____% , earnings above ____%
Customers no single customer above ____% of revenue
Owner will stay ____ months; business must survive without them
Hard no ____________________________________________
I will say no in one hour if: ______________________________What changes it after six months of real deal flow
Two things, usually. The size floor rises, because the small end turns out to be a job rather than an asset. And the sector list narrows, because the ones you understand start producing better questions than the ones you do not. Change it on purpose, in one sitting, and write down why.
Questions
- What is a buy box?
- The written set of criteria you screen acquisition targets against: size, sector, geography, margin, customer profile, owner involvement, and what you will not accept. Its job is to let you say no quickly.
- How specific should a buy box be?
- Specific enough that someone else could apply it without asking you. If two people reading it would disagree about whether a given business qualifies, it is not finished.
- Should I change my buy box during a search?
- Yes, once you have seen real deal flow, and deliberately rather than deal by deal. Widening it to fit the business in front of you is how a search stops being a search.