A buy box is a short written list of what a buyer will buy and what the buyer will never buy, set down before the search starts. Berkshire Hathaway's 2013 annual report shows the idea at company scale: beside a short list of criteria, it promised sellers an answer on whether it was interested, customarily within five minutes (Berkshire Hathaway, 2013 annual report).
Where the term comes from
Real estate investors use "buy box" for their personal rules on which properties to look at. The term has no single source and no published standard.
A company brings more to judge than a house: people, customers and a seller. The box's first line is still the kind of business. Among search funds, whose buyers raise money to buy and run one company, the industries targeted most in 2024 and 2025 were services, software and education, according to Stanford Graduate School of Business's 2026 search fund study (Stanford GSB, July 2026).
The never list comes first
A list of wants lets a company that meets five wants out of seven look close enough. A list of disqualifiers ends the screening at the first rule a company fails. A never rule is a fact that shows up before any serious work on a company, and one no price would fix for this buyer. The worksheet asks for at least three; the example below has six.
Berkshire's criteria page names its own never rules beside its wants: no turnarounds, no unfriendly takeovers, and no company without management in place, which Berkshire said it could not supply. The page ends on the screening problem in one line. An ad for collies, it says, brings calls from people hoping to sell cocker spaniels.
Seven dimensions of the wants
Once the never list exists, the wants cover seven dimensions, the same seven as the buy box worksheet. A dimension not decided yet stays marked open.
| Dimension | What the line records |
|---|---|
| Kind of business | The type of business, narrow enough to exclude a typical listing |
| Size | A floor and a ceiling on yearly owner earnings, with the reason for each |
| Distance | How far from home the business can be run |
| Money floors | Years of steady revenue, the largest share one customer may hold, and the share of repeat or contract revenue |
| What must exist | People and systems already in place, such as a manager or written scheduling and billing |
| Handover | What the seller does after closing, and for how long |
| Seller situation | The reasons for selling that are welcome, and the ones that raise concern |
The size line against the buyer
The size line carries two limits. The floor sits high enough that the company can pay someone to run it day to day if the buyer steps back; below it, the buyer is buying a job, which suits a buyer who wants one. The ceiling comes from the money the buyer can put in and the largest operation the buyer has run.
The box then goes up against the buyer's capacity: weekly hours in the first year, the money the household could lose without real harm, and experience today. A box that needs more of any of these than the buyer has changes before any listing arrives. How to pay for the purchase is a separate question, and it comes after this one.
A written line for every company
Each company screened gets one line in a log: the date, the company, the first never rule it failed or the wants it met, and the decision. After a year, the log shows which rule stopped the largest number of companies. When one rule stops nearly every company, the buyer rereads the thesis line behind it.
In a study published in the New England Journal of Medicine in 2009, eight hospitals in eight cities introduced a 19-item surgical safety checklist (Haynes and others, 2009). The study's abstract reports these rates:
| Measure | Before the checklist, 3,733 patients | After, 3,955 patients |
|---|---|---|
| Deaths | 1.5 percent | 0.8 percent |
| Inpatient complications | 11.0 percent | 7.0 percent |
The authors describe the checklist as associated with the fall; the study compared patients before and after it arrived. It measured surgery, not company purchases. The buy box borrows only the form: a short written check, run the same way on every company.
The exceptions ledger
When a buyer wants to break one of the box's rules, the ledger records the company, the rule and why this case seemed different. A rule that appears in the ledger three times gets a dated decision: the rule changes, with a reason, or it stands and every company that fails it is dropped.
A complete buy box for one buyer
Made up to illustrate: one buyer with 20 hours a week for the first year, $150,000 to $400,000 of personal money to put in, ten years of managing operations, no trade license, and a plan to keep the business indefinitely.
The never list, written first:
- Any dependence on the seller's personal trade license.
- Any customer over 30 percent of revenue.
- Revenue down in two of the last three years.
- Unresolved litigation or environmental exposure.
- A lease under three years on a business that cannot move.
- A seller who refuses a direct conversation with the second-in-command before closing.
The wants:
- Kind of business. Home and commercial services with contract or repeat revenue, such as pest control, heating and cooling service agreements, or commercial cleaning. The work calls for operations management, which this buyer has, and for no license the buyer lacks.
- Size. Yearly owner earnings between $250,000 and $600,000. Below the floor, the company cannot pay a manager when the buyer steps back. Above the ceiling, the money needed and the complexity of the handover outrun this buyer's capital and experience.
- Distance. Within 90 minutes' drive of home, because a first purchase run from far away adds a second unknown to the first.
- Money floors. Three or more years of stable or growing revenue, no customer over 20 percent, gross margin at or above what is usual for the trade, and 60 percent or more of revenue from contracts or repeat customers.
- What must exist. A second-in-command or senior technician who stays, and scheduling and billing written down well enough to survive the owner leaving.
- Handover. The seller is available for at least 90 days after closing, and no relationship with a customer, supplier or town office leaves with the seller.
- Seller situation. Retirement or a move is welcome. A distressed sale is acceptable only when the trouble is the owner's situation and the business itself is sound.
The two customer limits differ by design. A customer over 30 percent ends the look; a customer between 20 and 30 percent is allowed, and it counts against the company.
How a buy box fails
A box fails when it has wants and no never rules, when its ranges are wide enough to exclude nothing, or when it is copied from a buyer with more money, more time or different skills. A copied box sets its size range for the other buyer's money and hours.
The buy box worksheet prints from its page. A buyer with no thesis yet starts with how to write an acquisition thesis.
Sources
- Berkshire Hathaway Inc., 2013 Annual Report, "Acquisition Criteria" page (the chairman's letter is dated February 28, 2014), as filed with the Securities and Exchange Commission: sec.gov
- Stanford Graduate School of Business, "Search Funds Keep Offering a Proven Path to Ownership," July 13, 2026, on the 2026 Search Fund Study by Peter Kelly, Stefanos Zenios and Dom Ng: gsb.stanford.edu
- Alex B. Haynes and others, "A Surgical Safety Checklist to Reduce Morbidity and Mortality in a Global Population," New England Journal of Medicine 360, no. 5 (2009), pages 491 to 499: doi.org