A lot less than you might think. Try with a $5k maximum and get your feet wet before getting into bigger deals.
Normally I drop stuff on Fridays, but this is a short, in-between post.
People have an outsized expectation when I talk about buying small SaaS companies. Technically, a small business is fewer than 1,500 employees and a maximum of $38.5 million in average annual receipts. That's according to the SBA. That's crazy! I've seen public companies with fewer people than that!
But we're talking really small. Anywhere from a few hundred in MRR up to a few thousand.
The first SaaS we ever acquired was Screenshotapi.net. We bought it for $23,000 and we split it 4 ways. So roughly $5,750 each. That's not bad! It may take a while for you to save your way there but if you're considering buying stuff you should try to have some kind of cushion. I fully expected the first one to go to zero. You should too. Although the risk of buying something with revenue going to zero is potentially an order of magnitude less risky than starting from $0, it's still risky nonetheless.
So how small is small? Screenshot was doing $550 in MRR when we bought them. Sheet.best was doing under $1k, and Toybox was doing around $5,000. Not very much at all!
Each acquisition we did was incrementally higher than the last. It wasn't totally planned that way, but as we got more comfortable buying and operating, we were more comfortable with the risk. Now that we've had some actual experience, we're much more comfortable with higher purchase amounts.
If you're just getting started, I think a reasonable mental accounting is to be comfortable putting $5k at risk. If you can't find anything to buy at that price, then partner up with a few people to extend your purchasing power.