BY ROBIN GHOSH,
ECONOMIST AND BUSINESS MENTOR.
KOLKATA, 13 OCTOBER 2024:
A schoolmate of mine, a retired major in the army, once asked me why all the time we talk of ” startup” , why not “buying” a business? If I buy a business why should I not be considered as an “entrepreneur “?
My reply to my friend was ” you are indeed an entrepreneur and it is entrepreneurship by acquisition ”
Entrepreneurship through acquisition or ETA is another way to start a business.
ETA has many plus points:
1 You own a business without spending time and energy to start your own.
2 The risk burden is lower. Lower stress and anxiety.
3 Have an existing customer base and a steady cash flow.
If I have to identify the core advantages of ETA, I would say- since you have acquired an ongoing business- you are strategically positioned to take the business into the next level- uptick in sales and uptick in profitability.
Well, the next issue is there enough running business for acquisition and where to find them?
Quietly, in India, the ETA market is blossoming and platforms are available where you can buy and sell your business.
Primarily this is happening because:
1 Business owned by those aged 60 or older- many are looking to sell their companies and head off into the sunset of retirement
2 Absence of succession planning – no family or employees are interested in taking over.
The next question that comes to our mind is what is your financial game plan ?
Will you self- fund and acquire the business or will you arrange to mobilise My own recommendation is you should go by self funding alternative. The reasons:
1 Having full ownership of the business- you can take your decisions.
2 You can decide your location of business.
3 No management of stakeholder relationships or expectations.
4 Retain total equity in business and keep higher returns and profits.
Hail ETA Entrepreneurship Through Acquisition.
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