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  • January–February 2017
  • Article
  • Harvard Business Review

Buying Your Way into Entrepreneurship

By: Richard S. Ruback and Royce Yudkoff
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Abstract

An increasingly popular route to success as a small business owner is “acquisition entrepreneurship”—buying and running an existing operation. If you’re considering such a path, the authors offer practical advice for each stage of the process. Think it through. Do you have the right qualities for the job (managerial skills, confidence, persuasiveness, persistence, a thirst for learning, and tolerance for stress)? Are you willing to trade the benefits of working at a large organization for the chance to be in charge? Search diligently and efficiently. Plan to spend six months to two years—full time—following leads and systematically vetting business prospects. Focus on companies that are consistently profitable and have annual revenues of $5 million to $15 million. During this phase, you can self-finance or establish a search fund to recruit potential investors. Strike a deal. When you’ve settled on a target, do preliminary due diligence to confirm the business’s viability and arrive at a fair offer. If the seller accepts, you’ll have about 90 days to work with your accountant and attorney on confirmatory due diligence. Transition into leadership. After the sale closes, your priorities should be building relationships (with employees, customers, and suppliers) and setting up processes to ensure steady cash flow.

Keywords

Entrepreneurship; Acquisition; Planning

Citation

Ruback, Richard S., and Royce Yudkoff. "Buying Your Way into Entrepreneurship." Harvard Business Review 95, no. 1 (January–February 2017): 149–153.
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About The Authors

Richard S. Ruback

Finance
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Royce G. Yudkoff

Finance
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More from the Authors

    • January 2023
    • Faculty Research

    Lupoli Companies: Riverwalk - Making an Impact

    By: Richard S. Ruback, Marco Di Maggio, Dave Habeeb and Ruth Page
    • December 2022
    • Faculty Research

    Managing Pain in the Midst of an Opioid Epidemic

    By: Joshua D. Coval, Richard S. Ruback and Christopher Diak
    • November 2022
    • Faculty Research

    Entrepreneurship Through Acquisition: Brian's Journey

    By: Richard S. Ruback, Royce Yudkoff and Sarah Livick-Moses
More from the Authors
  • Lupoli Companies: Riverwalk - Making an Impact By: Richard S. Ruback, Marco Di Maggio, Dave Habeeb and Ruth Page
  • Managing Pain in the Midst of an Opioid Epidemic By: Joshua D. Coval, Richard S. Ruback and Christopher Diak
  • Entrepreneurship Through Acquisition: Brian's Journey By: Richard S. Ruback, Royce Yudkoff and Sarah Livick-Moses
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