How can one pursue an entrepreneurial career while minimizing the risks of starting a new business? For mid-career and millennial businesspeople, entrepreneurship through acquisition (“ETA”) may be an appealing career choice.
An increasing number of MBAs and professionals in middle management are choosing to pursue ETA. There are businesses in every price range that can be profitable investments. All it takes is a commitment to search for the right opportunity.
Before looking for an acquisition target, an individual should decide on a search model suited to one’s experience, goals and financial resources. Here are a few examples:
Entrepreneurs have several avenues by which to search for a business to acquire, such as direct outreach to businesses. However, the response rates are generally low, so quantity of outreach is important. Searchers often hire interns to augment this effort.
Business brokers are also a valuable source for deals. Searchers should try to get early access to listings by building relationships with brokers.
Intermediaries can also be great resources for connecting searchers to business owners. Accountants, attorneys and financial advisors are good places to start.
For additional guidance, see Harvard Business Review’s “Guide to Buying a Small Business” and Stanford University’s “Search Fund Primer,” both available online. For business owners looking to sell, ReverseSearchFund.com is a good resource.
About the Author: Saul Gorman is an independent consultant who holds a Wharton MBA. He is actively pursuing a self-funded search to acquire a business.