Should University Graduates be Buying Businesses As Opposed To Job Seeking?

The Harvard Business Review reports a “buy and run” model of occupation undertaken more and more by post-MBAs. https://hbr.org/2016/03/why-more-mbas-should-buy-small-businesses?referral=03759&cm_vc=rr_item_page.bottom I strongly concur with this.

For a while now, I have maintained that entrepreneurship by acquisition (not starting up, but acquiring and running an existing business) is the most sensible and fastest way to business success - for those who have what it takes to run a business. 

The traditional route is to seek employment upon graduation, frequently as a consultant. “Risk” is cited as the biggest reason against going into business for oneself. However, I do not really see that there is any more risk in buying and running one’s own business than there is in joining a mega firm with good promises and nice signing bonuses - only to see that dream job go sour in ten or twenty years. I see different risk.

According to the Harvard Business Review report, the money is not that much different between earnings as a consultant and earnings as a business owner. There is not even a risk of not finding a business to purchase. The baby boomer generation is primed and preparing for retirement and, if there are no viable heirs interested, looking for someone to purchase and prosper their lifetime investment. The number of available small to medium enterprises - those earing $1M - 20M in annual revenue - to purchase is skyrocketing as I write. 

So what is the risk? From my vantage point, the real risk for graduates with big dreams is to invest a lot of years into working for a company, only to have that business change and go a different direction than envisioned at the start. Leadership changes, the trickle down culture of the business model changes or the customer base changes. Now that business graduate is faced with changing themselves to be able to stay, or going elsewhere to chase the dream again. 

On the other hand, MBA’s with dreams of running their own business can do just that, by purchasing and owning an existing business. Buying a business is a much more viable option as opposed to starting one because of the time, capital and sweat equity that must be invested before you even know if you have a profitable idea. After purchasing a business of your own, you can hit the ground running. Your income is a more known quantity. Your client base already exists. Your history in the community is already established.

Also, as a competent business owner, you are the one in charge. The leadership team you select complements what you bring to the table; it does not compete with it. You make the decisions that suit you and your management style. The business goes the direction you want it to go.

You are the one who controls your own destiny. You can act on your own best behalf, and on the best behalf of those you employ. When incomprehensible and detrimental legislation is under review or passed, you are the one with the voice, instead of hoping and praying that your CEO will do the right thing. 

I believe it is the responsibility and the opportunity of every business owner to exert their best influence in and on behalf of their own community. In this way, bit by bit, the power returns to the people. The shrinking middle class will once again enjoy the surge of economic and social prosperity it knew 30 years ago.

With the right knowledge, it is easy to find and finance the purchase of an existing company. It does not even have to be your own capital invested in the purchase. Furthermore, a business that is in distress can be turned around to profit. This knowledge is readily found. There is no real risk for the savvy and ambitious business graduate. Rather, the advantages and benefits are myriad.