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We live in a time where starting an online business has never been easier. The Internet and AI allow you to do more things and reach more people than ever before. And yet many aspiring founders fail or burn out without achieving their goals. Why? Maybe because building a business isn't for everyone.
Entrepreneurship through acquisition can be a much faster route. An existing business already has customer, technology, staffing, income and product-market fit. Making money from these assets is easier than creating them, so you can skip the first few months or years of experimentation to get started.
Yes, some may be reluctant to sacrifice insights for gains from day one, but acquiring a company rather than building one opens doors for those who might otherwise burn out. Better yet: There is a suitable company for every type of entrepreneur and every budget. The barrier to entry is only as high as your available capital.
Instead of spending years working, buy a business that is already making money and has the talent you need to succeed. Focus on growth, not survival. Trade capital for time-to-market, the late-night hustle and bustle for instant income, and learn as you go. Interested? See if acquisition entrepreneurship is right for you below.
Related: Do you want to start a business? Consider buying a product like this instead – here's why.
Stairs or elevator?
Finding a market for a new product or service takes time and money. Before you can even think about scaling your business, you need to test whether people like what you have to offer. Between developing the product or service, marketing it, and collecting feedback, momentum can take months or years to build.
Now imagine skipping that early testing phase, knowing that your product or service is in high demand and you could capture market share the moment your business launches. The time saved is the time you can invest in growing the business by delivering more of what the market demands, thus multiplying your income.
Acquiring a company with growing revenue and cash flow shifts the focus from experimentation to scaling proven strategies. This means there is less financial risk, less wasted budget on failed marketing campaigns and less pressure to find customers. Instead, you know exactly where to spend your money.
Such knowledge only comes from building a successful business or buying a business where the hard lessons have already been learned. It's the work equivalent of taking the stairs or elevator. Which you prefer depends on you, but one of them is faster, easier and potentially offers bigger rewards sooner.
A polished product
Many people can't program or don't want to learn. That's okay. When you acquire a business, you acquire a finished or “turnkey” suite of technology, infrastructure and processes, often operated by those who built it and potentially remaining in place after the acquisition. Then you can focus on what you do best.
That's not to say that acquiring a tech company means you'll never need technical expertise. However, with ready-made, working and bug-free technology, you can achieve a lot before hiring developers. All prototypes were manufactured, tested and repeated. You simply decide what you want to develop next.
The company roadmap is a source of new growth ideas. New features, especially those that are consistently requested by customers, help increase perceptions of value and justify price increases. When you acquire a business, you don't have to conduct costly experiments to test the market – your customers will tell you what they want.
Related: 5 Important Factors Beginners Must Consider Before Buying a Business
Ready-made teams
When you build a business from nothing, you typically need to hire people who have more skills than you to perform various business functions. Maybe less fun roles, for example in human resources, technology or sales. Finding the right people for these jobs is a long and complex process. Hiring mistakes are stressful, costly, and require repeating the process (with the same risk of hiring the wrong people).
However, a company acquisition can also involve talented teams and executives. You can then ignore the costs of talent acquisition and the time spent on interviews, aptitude tests and onboarding. As long as you know how to lead (or are willing to learn or hire someone who can), attracting a high-performing team to complement your skills will maximize your return on investment in less time while reducing risk.
Follow your passions
There is a reason why startups fail at a rate of up to 90% or more. Sometimes it's at the wrong time and the wrong place. Others fall behind the competition or throw money at problems instead of solving them. But the psychological stress that comes with building a company from nothing can also weaken a founder's resilience.
Building a company from scratch means taking on all functions – sales, marketing, operations, human resources, finance, and more. Does your entrepreneurial passion span these departments? Does closing the books every month excite you as much as creating a viral marketing campaign? Struggling with things you are not passionate about can ruin your entrepreneurial experience.
The joy of owning a business is choosing the business you want to run and creating your day-to-day life. Do you love marketing? Acquire a company that has never posted an ad before. Do you enjoy leadership? Acquire a company with a strong but leaderless team. There are thousands of companies to choose from, so you don't have to sacrifice your passion for sales. Choose the right company and you will always love your work.
It's a journey through time – for your career
Buying a business can shave years off your career and encourage you to think bigger. Why make countless mistakes before you come across the one idea that succeeds? How long might this trial and error phase last? Can you afford to sacrifice years of your career to learn how to build a profitable business from the ground up?
You can own a profitable business for as little as $50,000. Will it be a stunning turnover? Probably not, but it's a reasonable starting point. And the upside potential is enormous. Acquisition is just the beginning of your journey. The next rung of the ladder is an exit. If you do it well, you will receive the reward for your hard work, potentially life-changing money, and the freedom to pursue another acquisition.
Some might say that the grind is a rite of passage where you learn more from failure than from success. But acquiring a company is no guarantee of success. It only increases your chances. If you can raise the capital, taking over a company often works better because the mistakes have already been made. The founder figured out what worked, and now you can capitalize on it by giving them an exit opportunity.
Related: What You Need to Know to Buy the Right Business and Build Your Empire
Is taking over a company suitable for everyone?
Building a business is not for everyone, nor is acquiring one. Some people are better suited to doing things alone and in their own way. There is always the possibility of cultures colliding once you take the reins. However, taking on a business to become a full-time entrepreneur is the fastest route you can take. It accelerates returns and frees you to focus on growth rather than survival.
Our advice? Start small. Acquire a company whose greatest weakness is your greatest strength and see how far you can take it. Rinse and repeat until you learn how to make consistent profits with a portfolio of startups. Maybe then you can start something completely new where you just “grind” the beans of your morning coffee. Anything else will be meaningful work and a happier life.