Last year, I started a part-time search to acquire a small business in Germany.

I was guided by the "HBR Guide to Buying a Small Business", which states that

1) Businesses with $800K-2M EBITDA typically trade at multiples of 3-5x EBITDA
2) For these businesses, there will be limited competition, as they are too small for PE investors
3) The most efficient way of sourcing these types of deals is via brokers

However, my experience has differed significantly from these expectations.

I've observed the following:
1) Competitive Bidding: Despite targeting businesses with €500-1200K EBITDA in Germany, each opportunity attracted bids exceeding 6x EBITDA, despite their moderate growth profiles.
2) Market Dynamics: For businesses under €500k EBITDA, there does seem to be less competition. However, from my perspective, it is not financially attractive to buy and operate such a business. Working (and being invested in) a PE-owned business offers similar expected returns at significantly lower risk.
3) Sourcing Challenges: Operating on a part-time basis, I've relied on brokers for over 90% of potential deals. The competitive nature of the market for companies with EBITDA over €500K makes this strategy less effective than anticipated.

Given these insights, I'm reevaluating my approach and would greatly appreciate your perspectives. Do you agree with my observations? Should I adjust my strategy?

I really appreciate your feedback on this.

Best regards,