Survey data from Contrarian Thinking’s business-

buying community, plus additional economic and

business data from Live Oak Bank and others.
Table of Contents

1. Introductory Analysis...................................................................2

2. Buyer Survey Data from Contrarian Thinking.....................9

3. SMB Market Data from Live Oak Bank................................24

4. Where You Can Learn More....................................................31

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 1

SECTION 1
Introductory Analysis
About the Small Biz Buyer
Insights Report 2024, and an
overview of the findings inside

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 2

About the Report

The information needs of current and aspiring business buyers are wide
and varying. Some may be interested in learning about the characteristics
of their fellow buyers, while others may want to build a stronger
understanding of the broader economy through an SMB lens.

This report seeks to shed light on both of these areas, and the data
gathered throughout highlights shifting priorities, opportunities, and
challenges business owners and buyers are facing today.

Drawing on information and perspectives from small businesses, current

and aspiring business buyers and sellers, and multiple industry experts,
this report provides a holistic look under the hood at factors influencing
buyer choices in a world rife with digital transformation and economic
uncertainties.

The report begins by focusing on unique buyer insights gleaned from

Contrarian Thinking’s survey of hundreds of members of our educational
business-buying community. The group represents a new, dynamic
movement of small business buyers, their acquisition efforts, financial
goals, and more. The report then frames the conversation by highlighting
owner sentiment, seller, and buyer data from Live Oak Bank and the
International Business Brokers Association.

We greatly appreciate all those taking the time to learn more about the
state of small business acquisitions — and we commend those working to
reinvent the American dream on their own terms.

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 3

ANALYSIS

Small Biz Buyer Insights 2024

It certainly is an interesting time to be

working in the business of small
business acquisitions.
2015

For decades, countless venture-

backed, growth-at-any-cost tech
companies launching with missions to
“change the world” held the spotlight.
TV shows, podcasts, books, news,
social media — you name it, they’ve
dominated it. But tides shift, and we
believe we’re witnessing a shift now.

Headlines that once highlighted

MBAs spurning top investment
2023
banking and consulting firms for
early-stage startups now focus on
those doing the same for SMB
acquisitions. We believe over the next
15 years, certain terms (“cash flow,”
“small business owner,” and
“profitable”) will develop a similar cool
factor to those that have pervaded
the last 15 (“founder,” “venture-
backed,” and “unicorn”).

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 4

ANALYSIS: Small Biz Buyer Insights 2024

Recent surveys from BizBuySell found 66% of business brokers think “an
increasing number” of buyers will enter the market in 2024. Additionally,
75% expect more owners to sell their business in 2024 than in 2023.

This might not be surprising to you. One, because of the rising age of
owners across the board (known as the “silver tsunami”), and two,
because of the renewed relevance small business ownership has
experienced in recent years.

Ages of U.S. business owners

30%
25%
20%
15%
10%
5%
0%
Under 25 25 to 34 35 to 44 45 to 54 55 to 64 65 or over
Source: US Census Bureau / Annual Business Survey from 2020

In just the past year, for instance, we’ve witnessed business owners,
buyers, sellers, lawyers, brokers, and operators building influencer-like
media followings. We’ve enjoyed new podcasts on a host of small
business-buying subjects. At Contrarian Thinking specifically, we’ve
continued building community, events, education, and media for current
and aspiring business owners and buyers. We’ve also continued operating
investment funds that directly invest in small businesses and
technologies that can support entrepreneurs and SMB growth.

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 5

ANALYSIS: Small Biz Buyer Insights 2024

For better or worse, the effects of all this interest in small business
acquisitions can compound. More attention attracts more buyers. More
buyers means more competition. More competition can mean better
outcomes for current and future owners and builders, and better
outcomes attract even more attention.

Relative Google search interest for “Buy a business”

100

80

60

40

20

0
2005 2010 2015 2020
Source: Google Trends

As business broker and Contrarian Community Facilitator Clint Fiore put it

recently, “Owners are getting hit up constantly right now by cold outreach
from PE, Searchers, Brokers, etc…” A problem with this, as he explained, is
that all this interest has started going to some owners’ heads.

“They think they’re hot stuff, that everyone ‘wants them’,” Clint explained.
Still, despite these recent effects, many believe the opportunities across
small business acquisitions are slated for strong continued growth.

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 6

ANALYSIS: Small Biz Buyer Insights 2024

So, what exactly do experts think about the state of small business
buying? What characteristics define this new generation of buyers? How
do owners view their economic position today?

Through this report, we sought to answer questions like these by

assembling a variety of data offering a holistic look at the realities on the
ground.

Median asking and sale price of small businesses

$400k

$300k

$200k Median asking price

Median sale price
$100k

$0k
2017 2018 2019 2020 2021 2022 2023

Source: Bizbuysell.com

We found that small business owner expectations about their own

financial conditions and that of the broader economy weakened into Q4
as prices rose, sales and profits slumped, and cash reserves remained
deflated. We also found that despite what many view as a frothy seller’s
market, seller confidence remains somewhat flat, possibly due to
uncertain inflationary conditions.

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 7

ANALYSIS: Small Biz Buyer Insights 2024

We also collected unique data about our community of current and

aspiring business buyers, their demographics, financial goals, and
acquisition efforts.

For context on the 230 members who account for our survey data in this
report, most respondents reported between $100k-$500k in income, and
the largest individual net worth cluster is the $1M-$5M group, at 24.6%.

Net worth of Contrarian Community survey respondents

Q1 2024 survey of 230 current and aspiring business buyers in the Contrarian Thinking community

20%
10%
0%
5M

M
M
1M
k
0k

k
0k

00

50

15
10
-$
10

25

-$

-$
$7

-$
$5
-$

-$

M
50
k-

0M
k-

M
$0

$1
k

50

$5
00
00

$7

$1
$2

$5
$1

Generally, respondents are early in their active acquisition search, and

many plan on spending up to 20 hours per week on biz-buying efforts, or
nearly 3 hours per day. Interestingly, the goal for income generated
through an acquisition listed by many (but certainly not all) respondents
could function as a replacement for current income.

Unsurprisingly to us, these buyers’ highest-ranked resource by

importance was access to a community of like-minded peers and
acquisition experts. Financial freedom, or the desire to achieve freedom
and build personal wealth through business ownership, was the
respondents’ highest-ranked motivation for pursuing acquisitions.

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 8

SECTION 2

Contrarian Thinking’s
Biz-Buyer Survey Results

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 9

About the SMB Buyer Survey

Wouldn’t it be fascinating to learn about a new generation of

business buyers operating in today’s environment?

We thought so. So we asked members of our business-buying community

a series of questions about their ownership experience, financial picture,
acquisition efforts, and goals.

Then, we analyzed the results and created this roundup of findings. The
following pages curate anonymous data from hundreds of Contrarian
Community members, representing 23% of our approximately 1000-
person community.

The findings offer an interesting look into the goals, activities, and needs
of biz-buyers at varying levels of reported wealth and at different, often-
early points on their small business acquisition journeys.

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 10

SMB BUYER SURVEY

Respondents’ Background
Q1 2024 survey of 230 current and aspiring business buyers in the Contrarian Thinking community

Work status
54.8% 29.6% 15.6%

Employed Self-employed/Freelance Other

Age Gender
50% 70%
60%
40%
50%
30% 40%

20% 30%
20%
10%
10%
0% 0%
18-24 25-34 35-44 45-54 55-64 65-74 Male Female Other

Location
60%
40%
20%
0%
US - other California Texas Florida Other countries

Family status
Married

64%

Have kids
64%

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 11

SMB BUYER SURVEY

Respondents’ Background
Q1 2024 survey of 230 current and aspiring business buyers in the Contrarian Thinking community

Industry
Professional, Scientific, and Technical Services

Finance and Insurance

Other Services (except Public Administration)

Construction

Information

Real Estate and Rental and Leasing

Management of Companies and Enterprises

Manufacturing

Health Care and Social Assistance

Educational Services

Transportation and Warehousing

Other
0% 5% 10% 15% 20% 25%

Are you currently a business owner?

Yes No

50.4% 49.6%

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 12

SMB BUYER SURVEY

Respondents’ Ownership Experience

Q1 2024 survey of 230 current and aspiring business buyers in the Contrarian Thinking community

While 50.4% of respondents describe themselves as business owners,

69.1% do not report having “significant experience” as an owner, and
32.6% count business ownership as their current primary role.

Do you have significant experience as a small business...

Owner Operator
69.1% 30.9% 58.3% 41.7%

No Yes No Yes

Which term best describes your current primary role?

35%

30%

25%

20%

15%

10%

5%

0%
Owner Employee Manager Executive Investor Other, NA Student

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 13

SMB BUYER SURVEY

Respondents’ Financial Picture

Q1 2024 survey of 230 current and aspiring business buyers in the Contrarian Thinking community

Among respondents, 70.6% have a net worth of $1M or less. The largest
individual cluster, however, is the $1M - $5M group, at 24.6%.

Net worth of respondents

25%
20%
15%
10%
5%
0%

5M

M
M
1M
k
0k

k
0k

00

50

15
10
-$
10

25

-$

-$
$7

-$
$5
-$

-$

M
50
k-

0M
k-

M
$0

$1
k

50

$5
00
00

$7

$1
$2

$5
$1

Among the $1M -$5M group, 38.6% have a net worth goal of $20M+.

Net Net worth goal

$100k - $250k - $500k - $750k - $1M - $5M - $10M - $15M -
worth $250k $500k $750k $1M $5M $10M $15M $20M
$20M+

$0 - $100k 1 4 4 6 1 4

$100k - $250k 2 2 2 9 6 6 2 6

$250k - $500k 1 15 14 7 1 11

$500k - $750k 7 6 4 1 5

$750k - $1M 1 3 11 10 2 9

$1M - $5M 1 15 15 4 22

$5M - $10M 2 6

$10M - $15M 2

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 14

PERSPECTIVE

Buyers: Get Decisive and Move Fast

“With over 10,000 baby boomers retiring on

average each day, we’re seeing continued Lloyd Silver
growth in the number of businesses for sale. Head of Product &
At the same time, there are more and more Experience at Contrarian
Thinking, small business
buyers looking to make an acquisition. owner and broker
Overall, we seem to still be in a seller’s
market where there is considerable demand
for the best listings. It’s not unusual right
now for the very best deals to receive
multiple offers and be under contract within
a period of a few weeks. Buyers need to be
decisive and move quickly when they see
something they like. We’re also in a period
of higher interest rates and tighter credit.
This is making financing through traditional methods
like SBA loans slightly more challenging than in the
past. Selling prices are holding strong on Main Street
where seller financing and other creative financing
methods are being used a bit more frequently. Terms
are being negotiated to a larger extent than price. As
people become more comfortable with the new
norm of higher interest rates, and inflation fears wain,
we‘re likely to see even more deal activity going
forward. Right now the overall sentiment is cautious
but seems to be improving steadily.”

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 15

SMB BUYER SURVEY

Respondents’ Financial Picture

Q1 2024 survey of 230 current and aspiring business buyers in the Contrarian Thinking community

Across net worth levels, respondents tend to favor the 5- to 10-year time
horizon for hitting their net worth goals. Additionally, most respondents
report between $100-$500k in annual net income.

Current Years to hit target net worth

net worth 0-5 5-10 10-15 15-20 20-25 25+
$0-$100k 5 6 5 2 1 1

$100k-$250k 11 11 6 4 3

$250k-$500k 7 17 20 5

$500k-$750k 4 14 3 2

$750k-$1M 9 12 15

$1M-$5M 13 30 9 2 1 2

$5M-$10M 1 5 2

$10M-$15M 2

Approximate annual net income

Current
<$75k $75k - $100k $100k - $200k $500k - $1M $200k - $500k $1M - $2M
net worth
$0-$100k 5 7 7 1
$100k-$250k 6 8 20 1

$250k-$500k 8 4 22 15

$500k-$750k 1 3 11 8

$750k-$1M 10 1 13 12

$1M-$5M 5 2 21 7 22

$5M-$10M 5 3

$10M-$15M 1 1

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 16

SMB BUYER SURVEY

Resources Biz-Buyers Say They Want

Average ranking based on importance to respondents, Q1 2024 survey of 230 current and aspiring
business buyers in the Contrarian Thinking community

Access to a community of business

buyers and acquisition experts

Access to education about

acquisition financing

Access to specific tools and to

assist with acquisition efforts

Access to education about

operational matters (time
management, negotiation, outreach,
networking, broker relations, taxes)

Access to education about legal

and regulatory matters

Access to education about post-

acquisition integration and growth

Access to education about

specific industries

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 17

SMB BUYER SURVEY

Motivations for Pursuing SMB Ownership

Average ranking based on importance to respondents, Q1 2024 survey of 230 current and aspiring
business buyers in the Contrarian Thinking community

Financial freedom: The desire to achieve

financial freedom and build personal wealth
through business ownership

Lifestyle change, such as the flexibility to

set one’s own schedule

Personal fulfillment or impact: Interests,

entrepreneurial aspirations, or impact on
employees and community

Operational autonomy and control: The

motivation to be in control of decision-
making and have autonomy over business
operations

Industry passion: Genuine interest and

enthusiasm for a specific industry or field in
which a business operates

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 18

SMB BUYER SURVEY

Respondents’ Acquisition Efforts

Q1 2024 survey of 230 current and aspiring business buyers in the Contrarian Thinking community

At the time of the survey, many respondents were early in their active
acquisition search, with a majority having been on the hunt for their first or
next business for 3 months or less.

Approximately how long have you been actively searching for

your first/next business to acquire?
Less than 1 month
1-3 months
3-6 months
6-9 months
9-12 months
1-2 years
More than 2 years
0% 5% 10% 15% 20% 25% 30%

How many hours per week do you plan to spend on

acquisition efforts (education, networking, outreach,
diligence, negotiation, etc.)?
0-10
10-20
20-30
30-40
40-50
50-60
60+
0% 10% 20% 30% 40%

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 19

PERSPECTIVE

The Year of the Cashflow Seller

“2023 represented what I believe may be a
peak year belonging to the seller. Strong Codie Sanchez
sales numbers of businesses, high demands CEO of Contrarian
as cash flow grew through the fourth Thinking, private
equity investor, and
quarter, and slightly higher prices from
SMB media figure
2022. We’ve seen profit multiples hold
steady as well as a slight downtick in
revenue multiples, which underlines how
cash flow businesses were prioritized over
all else. In our group of more than 1k current
and aspiring business owners, lots of deals
were done and volatility remained minimal,
with just a small handful of reported
business failures. However, I anticipate that
number will rise in 2024 across the industry.
Depending on how rates move, the upcoming
year could shift toward benefitting the buyer. This
past year was also a year we saw seller financing
surge across the board, with a number of our
community’s buyers landing significantly seller-
financed deals, and more buyers than I’ve personally
ever seen incorporate seller financing into deals.
There still appears to be a significant market of sellers
holding back against seller financing, as of course,
they’d prefer all-cash deals. If markets grow more
difficult for them, this could well change.”

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 20

SMB BUYER SURVEY

Respondents’ Acquisition Efforts

Q1 2024 survey of 230 current and aspiring business buyers in the Contrarian Thinking community

Across net worth and income levels, many respondents plan on spending
up to 20 hours per week on their small business acquisition efforts. (20
hours per week equates to 2.86 hours per day.)

How many hours per week do you plan to spend on

acquisition efforts (education, networking, outreach,
diligence, negotiation, etc.)?

Net worth 0-10 10-20 20-30 30-40 40-50 50-60 60+

$0-$100k 5 9 4 2
$100k-$250k 8 15 7 2 2 1
$250k-$500k 20 18 5 5 1
$500k-$750k 8 11 4
$750k-$1M 13 13 7 1 2
$1M-$5M 24 22 5 2 2 1 1
$5M-$10M 5 1 1 1

$10M-$15M 1 1

Annual net
income 0-10 10-20 20-30 30-40 40-50 50-60 60+
$0-$100k 5 9 4 2
$100k-$250k 8 15 7 2 2 1
$250k-$500k 20 18 5 5 1
$500k-$750k 8 11 4
$750k-$1M 13 13 7 1 2
$1M-$5M 24 22 5 2 2 1 1
$5M-$10M 5 1 1 1
$10M-$15M 1 1

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 21

SMB BUYER SURVEY

Respondents’ Acquisition Goals

Q1 2024 survey of 230 current and aspiring business buyers in the Contrarian Thinking community

Respondents are interested in acquiring businesses across a variety of

sizes. 48.7% are interested in the $500k-$1M purchase price category,
followed by $1M-$2.5M (45.7%) and $250k-$500k (37.1%). Notably, 94.8%
hope to leverage Seller Financing for their next acquisition.

In terms of purchase price, approximately what size business

are you looking to acquire?

Less than $50k

$50k-$100k
$100k-$250k
$250k-$500k
$500k-$1M
$1M-$2.5M
$2.5M-$5M
$5M-$10M
More than $10M
No specific preference
0% 10% 20% 30% 40% 50%

How do you plan to finance your next acquisition?

Seller Financing
SBA Loan
Cash
Other Loan
Sweat Equity
Friends & Family
0% 20% 40% 60% 80% 100%

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 22

SMB BUYER SURVEY

Respondents’ Acquisition Goals

Q1 2024 survey of 230 current and aspiring business buyers in the Contrarian Thinking community

42.2% of respondents are looking to generate $100k-$250k of income

from an acquisition, more than any other income category.

Income you’re looking to generate from an acquisition...

Less than $50k
$50k-$100k
$100k-$250k
$250k-$500k
$500k-$1M
Over $1M
$0 (don’t need income)
0% 10% 20% 30% 40% 50%

For many respondents (but certainly not all), goals for income from an
acquisition are near replacement levels for current income.

How much income are you looking

Annual
to generate from an acquisition?
net $0 (don’t $50k - $100k - $250k - $500k -
$1M+ <$50k
income need) $100k $250k $500k $1M

<$75k 3 17 9 2 4

$75k-$100k 10 8 5 1 1

$100k-$200k 2 9 50 25 6 2

$200k-$500k 1 6 20 26 4 5

$500k-$1M 1 2 7 1 2

$1M-$2M 1

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 23

SECTION 3

SMB Market Data From

Live Oak Bank and Others

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 24

MARKET DATA
Small businesses’ expectations about their overall
financial condition and the U.S. economy
Next 12 months net difference (improve — deteriorate)

70%

50%

30%
Net difference in
expectations for 10% 16%
the next 12 months
(improve — -10%

deteriorate)
-30% -28%
Overall financial condition
U.S. economy
-50%

-70%
2015 2016 2017 2018 2019 2020 2021 2022 2023

Source: Live Oak Banking Company, BusinessPulse Quarterly Trending Data (ending Q4 2023) powered by Barlow Research Associates, Inc.
Note: Data from surveys conducted in Q4 2023 by Barlow Research, involving a sample of 454 small businesses

MARKET DATA
Small business sales and profit net differences were
negative in Q4
Past 12 months net difference (increased — decreased)
Decreased (6%)
100% Prices Increased (43%)

80% Sales Prices

60% Profits after taxes

40% 37%
20%

0% Sales Decreased (31%)

-5% Increased (26%)
-20%
-23%
-40%

-60%
Profits
-80%
Decreased (40%)
-100% Increased (17%)
2015 2016 2017 2018 2019 2020 2021 2022 2023

Source: Live Oak Banking Company, BusinessPulse Quarterly Trending Data (ending Q4 2023) powered by Barlow Research Associates, Inc.
Note: Data from surveys conducted in Q4 2023 by Barlow Research, involving a sample of 454 small businesses

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 25

PERSPECTIVE

How Buying Power Could Change

“The silver tsunami of retirement-age

Americans looking to transition their small Mike McGinley
business ownership into new hands will Executive Vice President —
Small Business Banking, Live
continue driving activity in the Oak Bank
marketplace for the next 5-10 years.
However, we see two elements hanging in
the balance that could tip the
marketplace into greater activity if they
swing in the other direction. To start,
seller valuations are still high, even in an
elevated interest rate environment. The
combination of elevated interest rates,
and high valuations has had a negative
impact on the buying power of acquirers.
For Live Oak’s average deal involving a
business with $1M in EBITDA, we estimate the average
buyer now has 22% less borrowing power, which means
if they could afford to purchase a $5M business before,
now they can afford a business valued at $3.9M. This
has led to deals being done with either more cash in
from the buyer, or the seller holding a more substantial
seller note. The Fed’s projected interest rate cuts have
led to an influx of potential acquirers coming in from the
sidelines and we expect more to come once rates tick
down and sellers adjust the value of their companies in
line with market conditions.”

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 26

MARKET DATA
Net difference capital expenditures ticked up, while
hiring and excess cash reserves trended down
Past 12 months net difference (increased — decreased)

100% Capital expenditures Decreased (16%)

Increased (6%)
80% Full-time employees Full-time
employees
60% Excess cash reserves

40%

20% Decreased (17%)

8% Increased (25%)
Capital
0%
expenditures
-10%
-20%
-24%
-40%

-60%
Excess cash
-80%
reserves
Decreased (40%)
-100%
2015 2016 2017 2018 2019 2020 2021 2022 2023 Increased (16%)

Source: Live Oak Banking Company, BusinessPulse Quarterly Trending Data (ending Q4 2023) powered by Barlow Research Associates, Inc.
Note: Data from surveys conducted in Q4 2023 by Barlow Research, involving a sample of 454 small businesses

MARKET DATA
How small businesses intend to use excess cash
reserves over the next 12 months
Retain cash 53%
reserves

Pay down
debt 35%
33%
Will not have
cash reserves
22% 22%

Invest in capital 16%

13%
expenditures 13%
10%

Distribute to
stakeholders
4Q15 4Q16 4Q17 4Q18 4Q19 4Q20 4Q21 4Q22 4Q23

Source: Live Oak Banking Company, BusinessPulse Quarterly Trending Data (ending Q4 2023) powered by Barlow Research Associates, Inc.
Note: Data from surveys conducted in Q4 2023 by Barlow Research, involving a sample of 454 small businesses

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 27

SELLER DATA
IBBA: Seller’s market sentiment, by deal size Q4 ‘13-‘23
<$500k $500K - $1M $1M -$2M $2M -$5M $5M -$50M
100%

80%

60%

40%

20%

0%
Q4 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Source: Q4 IBBA and M&A Source Market Pulse Report found here.
Note: Data from survey conducted in Q1 2024, involving 382 business brokers and M&A advisors

SELLER DATA
IBBA: Owners who engaged in no formal planning prior
to engagement to sell, by deal size Q4 ‘23
80%

60%

40%

20%

0%
<$500k $500k - $1M $1M - $2M $2M - $5M $5M - $50M

Source: Q4 IBBA and M&A Source Market Pulse Report found here.
Note: Data from survey conducted in Q4 2023, involving 389 business brokers and M&A advisors

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 28

PERSPECTIVE

Adaptation in the Years Ahead

“The state of small business buyers reflects
a mix of discerning optimism and strategic Chris Petkas
General Partner at
recalibration. Current market conditions are
Contrarian Thinking Capital
marked by opportunity and adaptation. With and leads commercial AI/ML
the youngest baby boomers eligible for full efforts for the Defense
Innovation Unit
Social Security benefits in 2029, combined
with their lion’s share of SMB ownership,
there’s an estimated $10T in asset transfer
on the horizon. While challenges persist,
countless opportunities abound for gritty
entrepreneurs with an eye for digital
transformation and local knowledge, and
many transactions remain an instrument of
person-to-person interactions. Multi-time
founders with deep tech backgrounds are
now turning their sights to Main Street as well, bringing
businesses into the 21st century with a focus on vertically
integrated SaaS offerings consolidating traditionally fragmented
workflows. Increased awareness across the sector will continue
to attract talent to provide solutions to businesses in need of
catching up. In terms of SMB trends, we’re witnessing a surge in
niche markets and specialized services, especially business
services. From e-commerce to subscription-based models, small
businesses are differentiating themselves through niche
audiences and tailored offerings. As labor remains a top business
cost, new technologies and outsourced talent have also
redefined traditional models and opened new avenues for
growth. Looking ahead, the outlook for small businesses remains

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 29

promising — ‘once in a generation’ promising. Continued market
awareness and aging owners, coupled with technological advancements,
promise to fuel massive change. However, challenges such as sector
consolidation by large investment firms and uninformed sellers loom on
the horizon, underscoring the importance of deal access and strategic
foresight in navigating the years ahead.”

BUYER DATA
IBBA: Buyer characteristics, by deal size Q3 ‘23
<$500k $500K - $1M $1M -$2M $2M -$5M
First time buyer

Serial entrepreneur

Strategic buyers

Motivated to “buy a job”

Aim to gain a horizontal add-on

Located within 20 miles of seller

0% 10% 20% 30% 40% 50% 60% 70%

Source: Q3 IBBA and M&A Source Market Pulse Report found here.
Note: Data from survey conducted in Q4 2023, involving 389 business brokers and M&A advisors

Interestingly, IBBA data on page 28 shows nearly 74% of sellers in

smaller deals (<$500k) engaged in no formal seller planning prior to
being approached to sell. That percentage declines significantly as
you move upmarket, with 53% in the $500k-$1M range and 43% in
the $1M-$2M range noting the same. Similar deal size patterns can
be observed above among buyer characteristics, including the
percentage of first-time buyers in deals, buyers’ proximity to sellers,
and the number of buyers motivated to “buy a job.”

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 30

SECTION 4

Where You Can Learn More

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 31

About Contrarian Thinking
Contrarian Thinking is a fast-growing media, education, and investing
company committed to providing the tools, knowledge, and connections
needed to make small business ownership a reality for thousands of
people.

Through our Contrarian Community, we help people grow as deal makers

and learn how they can acquire a “boring business” that cashflows. We do
this by providing educational resources, personalized mentorship, weekly
expert speaker calls, facilitated events across the United States, a vibrant
online community of buyers, resources, and tools, and an impactful annual
3-day conference in Austin, Texas.

We also have millions of followers and subscribers across media

platforms. Our weekly newsletters are sent to hundreds of thousands, and
our YouTube channel has garnered over 4M hours of watch time.

We’re also proud to operate two investment funds — Main Street Hold Co.
and Contrarian Thinking Capital — that invest directly in small businesses
and the technologies powering them and their growth.

For more information about our Founder, Codie Sanchez, read her bio.

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 32

About Live Oak Bank
Live Oak Bank is on a mission to be America’s small business bank.

We strive to help customers master their business and achieve their

dreams. With a fusion of extraordinary service and expertise, our devoted
team embraces a creative approach to solving problems and surpassing
goals.

Live Oak is ready to support small business owners with customized loan
products focused on long-term success. Our team of industry experts
fully understands the nuances of small business and we want to invest in
our customers because we know they’re ready to make an impact.

Beyond the traditional banking experience, we endeavor to be an asset to

every one of our customers by turning obstacles into opportunities. Our
team is ready to confidently guide customers through the lending
process and craft a unique plan to help them thrive.

Live Oak Bancshares, Inc. (NYSE: LOB) is a financial holding company and
parent company of Live Oak Bank. Live Oak Bancshares and its
subsidiaries partner with businesses that share a groundbreaking focus
on service and technology to redefine banking.

To learn more, visit liveoakbank.com.

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 33

LINKS
Contrarian Thinking

Contrarian Thinking

Contrarian Thinking Capital

Main Street Holding Co.

Small Business Acquisitions Course

+ Community + Experts + Events

External Partner

Live Oak Bank

CONTRARIAN THINKING’S SMALL BIZ BUYER INSIGHTS REPORT 2024 34