TRM42: Entrepreneurship Through Acquisition: A Path to Well-Being and Work-Life Balance
Buying an established and profitable business is the lowest-risk and fastest path into the top 1%, without the demanding chaos of starting a business.
In recent years, there's been a noticeable shift in the business world. The relentless hustle culture that once dominated the entrepreneurial landscape is being replaced by a focus on well-being and work-life harmony. This change is not just a trend; it's a fundamental shift in how we approach work and life. One significant way this new ethos is manifesting is through the growing popularity of entrepreneurship through acquisition (ETA). More than 10 years ago, I started to see a trend where people wanted to move away from the 9-5 to be their own boss. They wanted to live life on their own terms. At the time, hustling and starting a business from scratch was popular—everyone wanted to be the next Zucks or Steve Jobs. To add to this, investments flowed towards growth. Many investors were investing in the idea, the team, and the growth plan.
Fast forward to today, under different and challenging economic conditions, most investors are looking to invest in profits. They no longer want to see a path to profitability; they want to see profits. Cue in ETA and buying existing businesses. This world satisfies investors and empowers people (builders and operators) to be business owners without starting something from scratch, thereby reducing the risk of failure. My business has definitely been a patient beneficiary of this shift.
Okay, so let’s get into it.
Hustle culture, characterized by long hours, constant networking, and a non-stop grind, has long been glorified as the path to success. However, this approach often leads to burnout, stress, and a lack of fulfillment. Most “hustlers” are chasing the wrong motive and more people are recognizing that relentless hustling comes at the expense of mental and physical health.
The new paradigm prioritizes harmony, health, and happiness. People are seeking careers or an entrepreneurial path (see above ETA) that allow them to thrive both professionally and personally. This shift is driving entrepreneurs to reconsider how they build and grow businesses. Instead of starting from scratch and embracing the chaos of the startup world, many are choosing to buy and build existing businesses, aiming to grow them into something bigger.
So, the question I get a lot is:
Why buy a business? And why would someone sell a business that is doing well?
Let me answer the last question first: right out of the gate, I’ve never seen a bad business sell. Crappy businesses stay on the market and don’t sell; that’s the truth. As for why someone would sell, there are many reasons: there is no family succession, they are retiring, they are sick, there was a divorce, they are ready for the next chapter, they want the windfall from the exit, they no longer have the vision, strategy, or access to resources to grow it, and so forth. In the end, due diligence will uncover all these details. Overall, ETA offers several advantages that align with the values of well-being and work-life harmony:
Stability and Security: Buying a business with an established brand and customer base provides a level of stability that startups often lack. This reduces the financial and emotional strain typically associated with starting a new venture.
Proven Business Model: An existing business has a track record of success, making it easier to project future performance and make informed decisions. This reduces the uncertainty and risk that come with launching a new business.
Immediate Cash Flow: Acquired businesses often come with existing revenue streams, allowing new owners to generate income from day one. This immediate cash flow can alleviate financial pressures and provide a sense of security.
Room for Innovation: While the business is already established, there is always room for growth and innovation. New owners can introduce fresh ideas and strategies to expand and improve the business, combining the excitement of entrepreneurship with the stability of an existing operation.
ETA is particularly attractive to those who value work-life harmony. By taking over an established business, entrepreneurs can avoid the extreme demands of the startup phase (the 0-1 stage is pure chaos; the 1-10 stage still comes with sacrifices, but it’s less demanding). They can focus on optimizing and growing the business without sacrificing their personal lives. This approach allows for a more sustainable work pace and greater control over one’s schedule.
Ultimately, the goal of entrepreneurship is not just financial success but also personal fulfillment and happiness. If you ask most successful business owners and entrepreneurs what the greatest benefit of owning their own business is, a majority will say it's the freedom and/or control over their time. ETA offers a balanced path that aligns with these goals. Entrepreneurs can achieve their professional aspirations while maintaining their well-being and enjoying a fulfilling life outside of work.
The shift from hustle culture to a focus on well-being and work-life harmony is reshaping the entrepreneurial landscape. Entrepreneurship through acquisition is a compelling strategy that aligns with this new ethos. By providing stability, reducing risk, and allowing for innovation, ETA offers a sustainable and fulfilling path for modern entrepreneurs. As we continue to redefine success, this approach may well become the new norm in the world of small and medium-sized businesses and we’re super excited that the market has caught up with our vision at BuyAndSellABusiness.com.
Let's continue,
Nunzio Presta
PS There are loads of buy-and-build books out there from SMB M&A experts, some good, some not so much, but I've noticed a big gap! After over a decade in the ETA scene, I think I've got something fresh for my very first book. Honestly, buying a business needs more talk, reading, and practice than starting one. I'll be announcing the publication date soon, but for now, I encourage you to join my waiting list here.