A generation is selling its life's work. The data is a mess.
Every day, ten thousand Baby Boomers retire. Among them are roughly two-and-a-half million small business owners—plumbers, restaurateurs, machine-shop operators, laundromat proprietors—each holding a piece of the largest intergenerational wealth transfer in American history. The buyers are ready. Search funds, ETA operators, and micro-PE firms have raised more capital than ever before.
The bottleneck is not capital. It is the data of the seller's shoebox: a decade of handwritten receipts, blurry PDFs scanned at the FedEx counter, QuickBooks files commingled with the owner's personal Amex, and a tax return that bears only a passing resemblance to either.
To verify a single store's true cash flow, a buyer pays a CPA $6,000 to $12,000 and waits three to six weeks. By the time the verification arrives, the deal has often gone cold. Most LOIs—an estimated seventy-three percent—die in diligence, not in negotiation.
“The hardest part of buying a small business isn't finding it, negotiating it, or financing it. It's proving the numbers are real.”