The romanticized path to entrepreneurship has always been the same: spot a gap, build from scratch, and hustle until profitability. But a growing number of younger entrepreneurs are rejecting that script. Instead of betting their futures on unproven ideas and years of uncertainty, they’re stepping into established companies with paying customers, built-in systems, and predictable cash flow from day one.
That’s because they’re well aware of the reality: starting a new venture means facing brutal odds, as around half fail within five years. On the other hand, acquiring an existing business comes with momentum already in the new owner’s favor. They don’t begin with zero revenue or a blank slate; they step into a foundation that’s been built over several years. It’s why more than a third of Gen Z and Millennial owners now plan to purchase a business from a retiring owner.
Over the next decade, an estimated 12 million privately held companies—worth roughly $10 trillion—are expected to change hands as Baby Boomers retire. Yet many have no succession plan, leaving them searching for someone to hand over the reins to. This means there’s now a greater opportunity to own a generational business without inheriting it through family lines.
This is known as Entrepreneurship Through Acquisition (ETA), and it’s opening doors for younger entrepreneurs to lead companies that already drive our economy.
What’s actually happening with entrepreneurship through acquisition
Baby Boomers currently own 41% of all privately held small businesses in the U.S. Together, they employ more than 25 million people, yet the majority are approaching the end of their careers with no one ready to take the helm.
Only a fraction of these owners have prepared for what comes next. Nearly 60% of them have no formal succession plan, and just 15% have gotten a professional business valuation. That leaves millions of strong, cash-generating companies running without a future leader in sight.
That gap is creating a rare opening for younger entrepreneurs. Roughly 350,000 Boomer-run companies go up for sale each year, and that volume is expected to climb. By 2030, the youngest Baby Boomers will hit 65—setting off the biggest transfer of business ownership in U.S. history.
Why entrepreneurs find this path appealing
Why do so many younger entrepreneurs have their eye on the ETA path?
When you start a business from zero, you’re betting on a product based on assumptions, not evidence. Then you’re hoping you can outrun competitors who may already dominate the space—all while gambling on timing, trying to become profitable before the money runs out.
Acquiring a company cuts out speculation. You’re buying proof: a model that’s been tested in the real world, customers who rely on it, and performance with a faster route to profitability. Here are a few key factors that appeal to younger entrepreneurs:
Immediate cash flow
Of the 10% of startups that succeed, it typically takes two to three years for them to become profitable. Choosing to own a mature business means you’re generating revenue from day one. You can cover operating costs immediately, pay yourself an owner’s salary, and reinvest in growth, skipping the cash burn entirely.
Proven product-market fit
After cash problems, the next biggest reason startups fail is painfully straightforward: there’s no real demand for what they’ve created. A proven business lets you bypass that trial-and-error phase. You inherit validated demand, paying customers, and consistent revenue you can build on.
Existing infrastructure
Building from scratch means creating everything at once: a brand identity, customer relationships, teams, supply chains, and systems and processes. An existing business already has those elements in play. Instead of spending years laying the groundwork, you can focus on improving how the company runs and pushing growth forward.
Common types of businesses being acquired
Some businesses make stronger acquisition targets than others. Besides generating steady revenue, they run on simple operations and have systems that don’t rely on the owner. Most fall into these categories:
1. Service-based businesses
These include HVAC companies, plumbing and electrical firms, drain cleaning and septic services, landscaping and lawn care, and residential/commercial cleaning companies. Operators benefit from recurring local demand and essential services that homeowners and businesses can’t put off purchasing.
2. Local retail and consumer services
Think laundromats, dry cleaners, car washes, auto repair shops, barbershops, salons, and fast-casual restaurants with a long operating history. They thrive because their customers already know them, and the business model is straightforward to take over and improve.
3. Professional services
These include accounting and bookkeeping firms, dental practices, insurance agencies, veterinary clinics, and similar offices. They’re attractive for their loyal client bases and repeatable systems that can be transitioned to a new owner without reinventing the business.
Key risks and realities
Even with strong fundamentals, acquiring a business isn’t a risk-free shortcut. Companies that look healthy on the surface can still carry costly problems under the hood. Here’s what to watch out for before you buy:
Hidden operational and financial problems
More than 40% of small business acquisitions reveal financial discrepancies. Sometimes it’s unverified revenue or inflated earnings. In other cases, it’s tax debt, unpaid invoices, overvalued inventory, or unresolved legal issues—plus aging equipment or regulatory violations that require quick fixes.
Overreliance on the departing founder
In small businesses, the owner is often the chief salesperson, the face of client relationships, and the cultural anchor. When they leave, customer loyalty and key vendor relationships can leave with them, making the transition harder for a new operator to manage.
Antiquated systems and messy books
Some Boomer-owned businesses still rely on outdated hiring, purchasing, and sales systems. That means you may find yourself with unsupported software, cash-based bookkeeping with no audited records, or undocumented processes.
How to know if this path might be right for you
Acquiring a company is more than a faster route to profitability. It’s a commitment to a legacy and a responsibility to keep it thriving. The opportunity is real, but it rewards operators ready for the long haul, not just the handoff. Here’s what to consider to determine whether this is the right move for you.
Financial readiness
Can you support the venture before it supports you? Buying a company doesn’t just require a down payment (often 10-20% of the price). It also means having enough capital to cover the transition period—recurring and unexpected expenses—while you learn the business. The cash flow may be there, but you still need the cushion to carry it through its first months under new ownership.
Skills and leadership
Do you feel prepared to lead a team that knows the day-to-day far more intimately? You’ll be managing people whose habits, routines, and customer relationships form the backbone of how the company operates. Keeping the business running smoothly requires understanding how things actually work and building trust with those at the heart of the business.
Risk tolerance and expectations
Are you willing to inherit any potential problems and be the one who fixes them? A business can be profitable on paper while still carrying operational gaps, unclear records, or other issues that only surface once you’re inside. It can take months of due diligence to reveal what’s there, and even longer to understand the underlying factors and put the right fix in place.
For those who want to build without beginning at square one, ETA is among the most powerful ways in. And if you want your acquisition to stay as strong as the day you bought it, clear, structured cash flow is essential. Relay gives new owners a simple way to organize accounts, manage spending, and keep the business running smoothly while you modernize it. See how Relay can help you streamline operations from day one.
Relay is a financial technology company and is not an FDIC-insured bank. Banking services provided by Thread Bank, Member FDIC. FDIC deposit insurance covers the failure of an insured bank. Certain conditions must be satisfied for pass-through deposit insurance coverage to apply.
