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From Interest to Action: Taking the Next Step in Your Acquisition Journey
Jed Morris' step-by-step guide for first-time SMB buyers
This article is pulled from a live workshop with Jed Morris. Special thanks to him for providing his insights! Join upcoming live workshops in the Mainshares Network.
People discover acquisition entrepreneurship in all kinds of ways—through a video, a tweet, a book, or a conversation with a friend. But interest alone won’t equip you to build your deal flow, connect with brokers, and ultimately, find your perfect business. The real question is: how do you channel your interest into real, actionable steps for your acquisition journey?
To answer that, we recently invited Jed Morris, Managing Partner at Sunset Coast Partners, to share his tactical framework for taking action toward ownership in a live webinar hosted in the Mainshares Network. Jed is a former Air Force senior non-commissioned officer turned self-funded buyer who has since transitioned into operating an independent sponsor model for lower-middle market acquisitions.
Here are his steps to starting a search acquisition for first-time buyers, with common pitfalls to look out for and tips on how to gain meaningful traction.
Step 1: Know what you’re getting into
Before you even begin outreach, it’s important to understand what you’re signing up for. Buying a business is a financial and deeply personal commitment with real downside risk.
Know the actual risk and reward profile of an SMB acquisition
While buying a business can be lucrative, it usually involves significant financial leverage. Most self-funded deals are SBA 7(a)-backed, meaning the buyer signs a personal guarantee and puts 60-80% debt on the company from day one. If you’re not watching your debt-service coverage ratio and managing cash flow properly, a downturn in sales can threaten your business’s viability. As Jed put it:
“A decline in revenue by as little as fifteen percent can wipe out your company.”
Closing on the right deal means ensuring you have enough cushion, either in the business or your personal finances, to weather unexpected storms.
Focus on surviving your first deal
Before you get ahead of yourself, dreaming of your future rollup strategy and holding company, the initial goal for your acquisition journey should be to survive your first deal.
“The most important thing on your first acquisition is not thinking about holdcos or roll-ups or bolt-on acquisitions or how you’re gonna be the next Warren Buffett. The most important thing is simply acquiring one business and not failing.”
Running a business is a lot harder in practice than strategizing on paper. Take your journey one step at a time, and that means focusing solely on your first acquisition before planning any expansion.
Understand your deal path options
There’s no single blueprint for financing your acquisition. Generally, entrepreneurs will either go down the traditional search fund route, “self-fund” their search with an SBA loan, or follow an independent sponsor model. Jed himself has closed self-funded searches and independent sponsor deals, and stresses that your strategy should be informed by your risk appetite, capital access, and operational experience.
Don’t underestimate the downside
Jed openly shared that his first acquisition failed. Despite doing his due diligence, signing a personal guarantee on the acquisition loan ultimately led to financial trouble:
“I have bought a business. It failed. I signed a personal guarantee on that. I went through a settlement, and it wiped me out financially. Bankruptcy is real.”
Particularly in highly leveraged deals, you don’t always have much room for seasonality or low periods in the business. Bad luck can impact even the most prepared operators. If you’re serious about pursuing ETA, it’s important to understand there’s no guarantee of success.
Step 2: Stand out as a qualified buyer
One of the biggest mistakes that first-time buyers make is underestimating how important credibility is in the early stages. To be viewed as a serious buyer, you need a few key components in place:
A professional resume: Your background doesn’t have to be in the exact industry you’re targeting, but your resume should highlight leadership roles, P&L responsibility, or team management. Brokers want to see evidence that you’re capable of operating a business.
A clear, concise statement of purpose: This isn’t a mission statement. It’s a 2–3 sentence intro explaining who you are, what kind of business you’re looking to acquire, and why. As Jed put it:
“Make sure that you're very clear about who you are, why you want to buy a company, and leave out the fluff. Not because I want to buy one company and steward that thing into a legacy for the next thirty years. Leave out that stuff. Just be really clear [on what you’re looking for and why].”
Proof of funds: According to Jed, fewer than ~3% of entrepreneurs include this in their initial outreach, and it can be a major credibility gap. You want to be able to show how much liquidity you have within five days — personal cash, investments, HELOCs, brokerage margin — whatever you could actually deploy. Learn more about how to get a verification of funds here.
External validation: Not required, but helpful. A letter of support from a lender, investor, or past acquirer signals that others believe in your ability to execute. Even soft commitments can go a long way in establishing legitimacy.
Step 3: Develop relationships with the right brokers
Brokers can serve as a helpful source of deal flow, especially for new buyers who may not have already built a robust proprietary deal flow engine on their own.
Know the ecosystem
The range of broker quality is vast. Unlike other regulated industries, there’s no license or certification required to become a business broker, which means you’ll encounter everyone from former investment bankers to untrained intermediaries.
Identify and qualify high-quality brokers
Jed recommends filtering brokers the same way they’re filtering you. Do they specialize in your geography or industry? Have they closed deals recently? Can they articulate what a good buyer looks like?
Build and maintain relationships
Brokers are constantly scanning for buyers they can trust. Your job is to make it easy for them to think of you when a good deal comes across their desk.
You want them to know that you’re qualified and know that you want to buy in this industry As long as you can get them to trust you, they will call you. They will email you. They will let you know.
Consistent communication is key. Jed recommends checking in every 2–3 weeks with updates on your search status or buy box.
Run your own process
You, not the broker, control your LOI structure, exclusivity period, and legal docs.
“You control your process. A broker should never have to give you their contract, their LOI, their purchase agreement, any of that stuff.”
Being confident in your process builds respect and helps you avoid getting taken advantage of by sellers or intermediaries.
Step 4: Build a proprietary deal flow engine
While proprietary search is often seen as the most effective way to source deals, as a first-time buyer, brokered outreach is often the smoothest way into the industry.
But once your broker funnel is up and running, here’s how to approach proprietary search effectively:
Build a cold outreach system: Use tools like Clay or Apollo to source leads, enrich contact data, and deploy cold email campaigns. Your goal is high-volume, low-cost contact with current business owners who haven’t listed their companies for sale.
Prioritize authentic seller relationships: When you’re reaching out cold, you’re not just sourcing deals, you’re also playing the role of the owner’s therapist, educator, and transaction advisor. Sellers need to trust you personally and professionally before they’ll move forward.
“Now you’ve also become a therapist because the seller is going through the largest transaction of their entire lives.”
Prepare for inefficiency and fallout: Many leads won’t convert. You’ll sign NDAs and review financials, only to realize the business is far outside your buy box. That’s normal and a good reason to have broker deal flow running in parallel.
Invest in high-ROI channels: Cold email is your outbound engine, but real relationships still matter. Jed emphasizes showing up in person where owners congregate:
“I’m at a conference in DC with defense contractors… I’m having a beer with them at the hotel that evening. So you need to understand where do the owners in my industry, my target industry, where do they hang out?”
Tools to use in your outbound campaign
Jed shared his current tech stack, which covers everything from initial lead generation and enrichment to his customer relationship management software, finance tools, and more.
Final thoughts
Searching is hard. It’s lonely. It often takes longer than expected. But the real risk isn’t spending 18 months and walking away empty-handed — it’s rushing into the wrong deal. As Jed puts it:
“Not finding a business to buy is not the worst thing in the world. Buying the wrong business is the worst thing in the world.”
By setting the right foundation, running your search like a startup, and surrounding yourself with experienced voices, you give yourself the best chance to not just buy a business, but to buy one that satisfies both your personal and professional needs.
Thanks again to Jed Morris for sharing his insights in the Mainshares Network! You can follow him on Linkedin, Youtube or Still Searching, his weekly newsletter.
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