For decades, entrepreneurship has been synonymous with building a business from scratch. However, today more entrepreneurs are taking a different route. Rather than launching startups, they're buying established businesses with existing customers, cash flow and operating systems. Known as entrepreneurship through acquisition (ETA), this approach is becoming an increasingly popular way to build wealth and business ownership .

The shift is being fueled by one of the largest business ownership transitions in U.S. history and growing awareness that acquiring a business can be just as entrepreneurial as starting one.

What Is Entrepreneurship Through Acquisition?

Entrepreneurship through acquisition involves purchasing an existing business instead of creating one from the ground up. Some entrepreneurs buy businesses directly using financing or personal capital, while others raise investment through search funds or acquisition partnerships.

Regardless of the structure, the goal is the same: acquire a healthy business, improve it and create additional value over time.

Why Entrepreneurship Through Acquisition Is Growing

One of the biggest drivers behind ETA is demographics.

According to McKinsey, approximately six million small and medium-sized businesses are expected to transition ownership by 2035 as baby boomer owners retire. Together, those businesses represent as much as $5 trillion in enterprise value. Many are profitable companies without clear succession plans, creating opportunities for entrepreneurs looking to acquire rather than build.

At the same time, entrepreneurship through acquisition has become far more visible. Business schools now teach it, podcasts and online communities regularly feature acquisition stories, and financing options have expanded for qualified buyers.

Stanford Graduate School of Business reports that search funds continue to gain traction, with nearly 60% successfully acquiring a business. What was once considered a niche strategy has become an established path to entrepreneurship.

Buying A Business Changes the Risk

Starting a business requires entrepreneurs to prove that customers want their product or service while simultaneously building systems, hiring employees and generating revenue.

Buying a business doesn't eliminate those challenges, but it changes where the risk lies.

An established business may already have recurring customers, experienced employees, supplier relationships and years of financial history. Instead of proving the business model, the new owner can focus on improving operations and growing an existing foundation.

That doesn't mean success is guaranteed. Acquirers still need to lead people, manage cash flow, build customer relationships and make sound strategic decisions. The risk shifts from validating an idea to successfully executing a proven business.

What Buyers Are Looking For

Not every business is an attractive acquisition.

Sophisticated buyers look for businesses with strong financial performance, recurring revenue , diversified customers, reliable financial reporting and opportunities for future growth. They also place significant value on businesses that aren't heavily dependent on the owner.

If customer relationships, daily operations and key decisions all rely on one person, the transition becomes riskier. Businesses with documented processes, capable management teams and transferable operations are typically more attractive because they provide buyers with greater confidence that performance will continue after the acquisition.

Entrepreneurship through acquisition isn't just changing how businesses are bought; it's changing what buyers expect.

Today's buyers evaluate far more than revenue and profit. They assess whether the business can operate independently of the owner, whether financial information is reliable and whether there is room for future growth.

Business owners who improve these areas aren't simply preparing for an eventual sale. They're often creating stronger, more profitable businesses in the process.

Entrepreneurship through acquisition is expanding the definition of entrepreneurship. Instead of building from zero, more entrepreneurs are creating wealth by acquiring businesses with proven foundations and helping them reach their next stage of growth.

For business owners, entrepreneurship through acquisition presents an important opportunity. The businesses most likely to attract this growing pool of buyers are those with strong financial performance, transferable operations, reduced risk and clear growth potential. Whether you're planning to sell in two years or twenty, building a business that's worth buying is a strategy that pays dividends long before a deal is ever signed.

Melissa Houston, CPA, CEPA , is a Business Value & Financial Strategy Advisor and a Forbes.com contributor who writes about building profitable, sellable businesses.

With more than 25 years of experience in finance and accounting, she helps entrepreneurs increase profit, improve cash flow, and build companies that create long-term wealth. Her work focuses on financial leadership, profit optimization, and increasing business valuation through strategic decision-making.

Melissa is a Certified Exit Planning Advisor (CEPA), specializing in helping founders understand and close the gap between their current business value and its full potential. She works with business owners to strengthen financial performance, reduce risk, and position their companies for successful exits.

A published author of Cash Confident: An Entrepreneur’s Guide to Creating a Profitable Business , Melissa is a recognized voice in financial strategy and entrepreneurial wealth-building.

The opinions expressed in this article are not intended to replace professional accounting or tax advice.