Owning a business has always been a dream for many, but today’s generation of young entrepreneurs is approaching it differently than past generations. In 2024, more young people are realizing that buying an existing business can be a faster, smarter, and more sustainable way to achieve their entrepreneurial dreams. Instead of starting from the ground up, many are opting to purchase existing cash-flowing businesses—and for good reason. Let’s explore why this trend is growing and how it can lead to greater success.
The world of business ownership is changing. Gone are the days when entrepreneurship was synonymous with starting a business from scratch. According to a recent study, millennials and Gen Z are increasingly becoming business owners, with a growing percentage choosing to buy businesses rather than start their own.
Why is this shift happening? Young people today are more tech-savvy, financially aware, and value-driven than ever before. They’re interested in freedom, financial independence, and impact—and buying an existing business offers a direct route to these goals.
Starting a business from scratch can be overwhelming, especially when you consider the time, effort, and uncertainty involved. That’s why buying an established business, especially one that’s already generating cash flow, is becoming a more attractive option for young entrepreneurs.
Here are a few key reasons why buying a business is gaining traction among younger generations:
Starting a new business often comes with a waiting period before you can turn a profit. It could take years to break even, let alone see consistent income. When you purchase an existing business, you're buying into immediate cash flow. This means you can start earning an income from day one, which is a major advantage over building from the ground up.
For young people looking to secure financial independence or make a career change, this offers more stability and security.
When you buy a business that has been operational for years, you’re taking over something with a proven track record. The product or service has been validated, there’s an established customer base, and the operations are already in place. Instead of worrying about whether your idea will succeed, you can focus on optimizing and growing what’s already working.
This is particularly important for young buyers who may not have years of entrepreneurial experience. With the right business, they can skip over the trial and error stage that new startups face.
It’s often easier to secure financing to purchase an existing business than it is to fund a startup. Lenders are more comfortable providing loans for businesses with a history of profitability and reliable cash flow.
One of the most popular options for financing acquisitions is through SBA 7(a) loans, which offer favorable terms for young buyers looking to purchase a business. Additionally, seller financing—where the seller offers a loan to cover part of the purchase price—is also a common option, making it easier to buy with less upfront capital.
While the startup culture is still strong, many young entrepreneurs are realizing that the risk and uncertainty of starting from scratch can be daunting.
By purchasing an existing business, young entrepreneurs avoid many of these hurdles. They can focus their energy on growing and improving an already operational business, rather than worrying about survival in the early stages.
Finding the right business to buy is crucial to success, and young entrepreneurs are getting creative in their search. Here are a few ways they’re discovering great deals:
Business Broker Websites: Platforms like BizBuySell and BizQuest allow buyers to search for businesses in specific industries or locations. These platforms list businesses for sale and provide key details to start evaluating opportunities.
Off-Market Deals: Networking and relationship-building are key for finding off-market opportunities. This includes reaching out to small business owners directly, attending industry events, and connecting with local business associations. Many of the best businesses never make it to a public listing because they’re sold through personal connections.
Creative Financing: Young people are using creative strategies like seller financing and investor partnerships to make buying a business more accessible. By leveraging these options, they can purchase businesses with little upfront cash.
If you're thinking about buying a business, here are a few tips to guide you:
Define Your Goals: Know what kind of business aligns with your interests and skills. Do you want to buy a business in a specific industry? What size business is ideal for you?
Understand Financing Options: Explore all financing avenues, including SBA loans, seller financing, and private investors. Knowing your financing options will help you make informed decisions.
Do Your Due Diligence: Always conduct thorough research on the business you're considering. This includes reviewing financial statements, legal issues, and market potential.
Get Professional Help: Consider working with a business broker, accountant, or legal advisor to ensure you're making a sound investment.
The world of business ownership is evolving, and young people are leading the charge. By choosing to buy existing businesses rather than start from scratch, they are capitalizing on the benefits of immediate cash flow, proven success, and more accessible financing. With the right approach, buying a business can provide both financial independence and the opportunity to build a lasting legacy.
Ready to explore buying a business? At Imperial Peak Global, we specialize in helping young entrepreneurs find and acquire thriving businesses. Contact us today to learn more about how we can help you achieve your entrepreneurial dreams.