January 26, 2026
A few months back, a buyer called me about a service company in Downers Grove. Nice shop. Clean trucks. The owner had been there forever and wanted an LOI fast. The buyer was excited, and he should've been, it was a real business with real customers. But we slowed it down for about 48 hours, checked the lease, looked at the top 10 customers, and asked how the earnings number was built. Good thing. One customer was almost 32% of revenue and the lease had no clean assignment language. Not a dead deal. Not even close. We fixed it in the LOI, added a longer owner transition, cleaned up the financing plan, and the deal closed.
That's how this should work.
DuPage County has a lot of good acquisition targets. Established service companies. Light manufacturers. Specialty distributors. Healthcare-adjacent businesses. Owner-operated companies in Glen Ellyn, Naperville, Wheaton, Lombard, Downers Grove, Elmhurst, and the towns around them with long local reputations. These aren't spreadsheet businesses. They're built on crews, customers, routes, machines, contracts, and trust.
And when you find one you like, it's easy to move too fast. Don't. The LOI sets the tone for price, structure, exclusivity, timing, and the big deal terms before full due diligence even starts. So you don't need to inspect every invoice before signing. But you DO need to verify the right stuff.
Check the earnings first
Most smaller business deals are priced off normalized cash flow. Usually seller's discretionary earnings or adjusted EBITDA. Fancy words for this: what cash does the business really throw off after we clean up owner-specific items?
Before you sign the LOI, ask how that number was built. Not guessed. Built.
- Get three years of P&Ls.
- Ask for balance sheets.
- Review tax returns when available.
- Look hard at owner add-backs.
- Compare revenue growth to gross margin.
- Watch payroll, rent, subcontractors, insurance, repairs, and professional fees.
Add-backs are where deals get goofy. Some are fine. Owner health insurance? Maybe. One-time legal bill? Maybe. Personal truck expense? Maybe. But if every other line item magically becomes an add-back, that's a red flag. It doesn't mean walk away, it means price and structure need to reflect reality.
A business can show strong discretionary earnings and still have weak tax return support. It may still be financeable. But you need to know that before you offer the moon and then ask the lender to bless it. Tangent Brokerage sees this all the time, and the fix is simple: frame it early, write a smarter LOI, and keep the deal moving.
Who controls the customers?
DuPage County companies often have loyal local customers. That's a big plus. Route density in the west suburbs? Great. Repeat contracts? Love it. Strong online reviews? Even better.
But ask the next question: where does the revenue actually come from?
Before the LOI, ask for anonymized customer concentration. Top five customers. Top ten customers. Percentage of revenue from each. You don't need names yet, but you need the math.
If one account, one referral source, one municipality, or one handshake relationship drives a big chunk of sales, you need to know. Again, not a deal killer. Just something you price, structure, and transition around.
Then ask how customers are won:
- Repeat contracts?
- Recurring service revenue?
- Route density?
- Online reputation?
- Referrals from the owner?
- Personal relationships?
If the owner is the sales engine, your LOI should say that owner is sticking around for introductions, training, and customer handoffs. You may also want some seller financing tied to retention. That's not being difficult. That's being smart.
The lease can make or break it
Real estate gets ignored until late in too many deals. Bad move.
In DuPage County, rent, zoning, parking, loading access, signage, and distance from labor or customers can change the value of the business. A Lombard distributor with great loading access isn't the same business if you move it 12 miles away and lose half the warehouse staff.
Before signing, find out:
- Is the lease assignable?
- When does it expire?
- Are there renewal options?
- Are rates predictable?
- Will the landlord approve you?
- Do personal guarantees need to be replaced?
- Is there a specialized buildout, shop layout, yard space, or equipment connection?
- Would moving hurt revenue, employees, licensing, or permits?
If the owner also owns the real estate, nail that down early. Is the building included? Leased separately? Available to buy later? Don't assume friendly occupancy terms because everyone is smiling at the first meeting. Put the basics in writing.
Talk to financing before exclusivity
An LOI usually gives you exclusivity. That means the owner takes the business off the market while you do diligence. That's valuable. Treat it that way.
Before you ask for exclusivity, talk with an SBA lender or acquisition financing source. Give them the target's earnings, collateral, industry, buyer equity injection, lease situation, and likely structure. Let them poke holes. Better now than week five.
SBA financing can be a great fit for Main Street and lower middle market deals. But lenders have rules. They look at tax returns, cash flow coverage, buyer experience, working capital needs, lease terms, and seller notes. If the price only works with aggressive add-backs or heroic growth assumptions, fix the structure before the LOI is signed.
Pro tip: A lender saying maybe is not the same as approved. Get specific.
Say what you're buying
This sounds basic. It isn't. Deals get sideways because nobody clearly said what's included.
Your LOI should address cash, accounts receivable, inventory, work in process, deposits, vehicles, equipment, trade names, phone numbers, websites, and social media accounts. Also excluded assets. Also assumed liabilities. Also target working capital, if that applies.
A specialty distributor may need a meaningful inventory level to produce the earnings you're buying. A service company may depend on trucks, tools, software licenses, and phone numbers. A healthcare-adjacent or professional services business may have contracts or credentials that don't transfer automatically.
Write it down. Short and clear. Saves a fight later.
Decide how much transition you need
Some buyers need two weeks of training. Some need six months of the owner showing up, making introductions, helping with licensing, teaching estimating, or transferring technical, clinical, or regulatory knowledge.
What do you need? Not what sounds easy. What the business actually needs.
- Will key customers get introduced?
- Will vendors stay in place?
- Is there a second-in-command?
- Can managers run daily operations?
- Will employees stay after closing?
- Does the owner hold key know-how?
If the owner is critical after closing, don't settle for a vague promise to help out. Build the transition into the LOI. Dates. Duties. Pay, if any. Expectations. Simple.
Make the LOI a roadmap
A good LOI isn't just a price on paper. It's a roadmap for diligence, financing, legal documents, and closing.
The strongest offer isn't always the highest offer. I've seen lower offers win because the buyer understood the business, had financing lined up, and knew exactly what needed to be solved before closing. Owners like certainty. Banks like clarity. Attorneys like clean terms. Everybody moves faster when the LOI makes sense.
So before you sign, verify earnings quality, customer concentration, lease control, financing fit, included assets, and transition needs. Then move. Good DuPage County businesses don't sit forever, and when you find the right one, you want to be ready.
FAQs
Should I finish full due diligence before signing an LOI?
No. That's not realistic in most private business deals. But you should verify enough to avoid making an offer that falls apart with the lender, attorney, or accountant.
How much financial history should I review before the LOI?
Ask for at least three years of profit and loss statements, balance sheets, and tax returns when available. You don't need every receipt yet, but you need to understand the earnings story.
Is customer concentration always a problem?
No. A big account can be a great account. But if the top five or top ten customers carry the business, your LOI should address retention, transition support, and maybe seller financing.
Can lease issues kill a DuPage County business acquisition?
They can slow it down fast. The fix is to check assignment rights, renewal options, landlord approval, zoning, parking, loading access, and guarantees before you lock in your offer.
What should be included in the LOI?
Price, structure, financing, exclusivity, timing, included and excluded assets, assumed liabilities, working capital if needed, and owner transition terms. Keep it clear. Clear wins.
If you're buying a business in DuPage County and want a second set of eyes before you sign the LOI, contact Tangent Brokerage at 630-862-5234. And if you're thinking about selling now or later, request a free valuation. There's a good exit out there, and the right prep makes it a whole lot better.