Thoughts on Buying a Businesses with owner willing to stay on for 5 years?

searcher profile

October 02, 2025

by a searcher from Northwestern University - Kellogg School of Management in Chicago, IL, USA

There was a great recent post here on the risks of buying a business that’s “too small,” and I wanted to add some context from my own situation. I’m currently looking at an off-market deal: a 30 year food distribution company serving food service customers in Chicago. The business has 15 employees and generated about $493k in EBITDA; 650k in SDE in###-###-#### The seller is open to staying on for up to five years post-acquisition and is also willing to provide seller financing. Given the earlier discussion around the risks of size, I’d be interested in hearing thoughts on how a longer succession plan and seller involvement might change the equation of risk in a deal like this.
5
25
389
Replies
25
commentor profile
Reply by a searcher
from Indiana University, Bloomington/Indianapolis in Hanover, NH, USA
I think it can do a good job of reshaping the risk, but it doesn’t automatically remove it. At $493k EBITDA / $650k SDE, the size risks you’ve seen (key-person dependence, customer concentration, thin margins, WC intensity) still apply. A well-structured, phased seller role + note can de-risk execution if you align incentives and hard-code decision rights. I think a five-year seller stay is valuable only if you retain Day-1 control and can tie the seller’s economics to knowledge transfer + retention/margins.
commentor profile
Reply by an investor
from Stanford University in Palo Alto, CA, USA
It depends. The seller remaining involved long-term can be highly beneficial in scenarios where the seller is driving significant growth that you'd otherwise struggle to drive, freeing you up for other uses of your time. What you don't want is a situation where you are carrying deadweight (EBITDA declines due to the seller not being motivated + you're now covering both your and their pay). And as Jorge mentioned, clarifying roles now, pre acquisition, would be crucial.
commentor profile
+23 more replies.
Join the discussion