Why Entrepreneurship Through Acquisition (ETA) Is an Exciting Option for Business Growth
Starting a business from scratch may seem like the most logical option for entrepreneurs, but it’s not the only path to success. Entrepreneurs can opt for the entrepreneurship through acquisition (ETA) route, where they take over an existing business rather than starting from zero. ETA may seem unconventional, but it is a proven method for business growth. In this blog post, we’ll explore why ETA is an exciting option for aspiring entrepreneurs looking to build a successful business.
Introduction
ETA is not a new concept, but it has gained popularity in recent years. According to a study by Stanford Graduate School of Business, over 11% of MBA graduates had considered ETA, and 20% of those graduates had pursued the option after completing their degree. This clearly shows that the ETA route is a viable option for aspiring entrepreneurs.
In ETA, entrepreneurs acquire an existing business to grow it further, rather than starting from scratch. This approach allows entrepreneurs to buy a company that already has an established customer base, a successful business model, and a proven track record of profits. This means that entrepreneurs can hit the ground running and start generating revenue from day one.
Benefits of ETA
ETA offers several benefits to entrepreneurs.
Established Business Model
Acquiring an existing business means that entrepreneurs also acquire an established business model. This model has already been tested and proven to be successful. With a proven business model, entrepreneurs can focus on scaling up the business rather than figuring out how to make it work in the first place.
Immediate Cash Flow
Starting a business from scratch means that entrepreneurs have to start by creating a product or service, which takes time to develop, market, and sell. Alternatively, ETA offers immediate cash flow. The acquired business is already generating revenue, which means entrepreneurs can start making money from day one.
Established Customer Base
Acquiring an existing business also means acquiring an established customer base. The acquired business already has customers, which means entrepreneurs don’t have to start from scratch to find new customers.
Successful ETA Examples
Several entrepreneurs have taken the ETA route and have built successful businesses. Here are some examples of successful ETA businesses:
LinkedIn was acquired by Microsoft in 2016 for $26.2 billion. LinkedIn started as a social network for professionals in 2002; it was acquired by Reid Hoffman in 2003. Hoffman is a successful entrepreneur who has invested in companies like Facebook, Flickr, and Zynga. In 2016, Microsoft acquired LinkedIn to further develop its business-to-business (B2B) presence.
Duncan Hines
Duncan Hines was a food critic who created a line of products for his readers. He eventually sold the rights to his name to a food company that transformed the brand into a cake mix empire. The brand was later acquired by Procter & Gamble, and today Duncan Hines products are available worldwide in over 80 countries.
Conclusion
Entrepreneurship through acquisition (ETA) offers a unique opportunity for aspiring entrepreneurs to build a successful business. Acquiring an existing business that already has a proven track record of profits, an established customer base, and a successful business model means that entrepreneurs can avoid many of the challenges associated with starting a business from scratch. By taking the ETA route, entrepreneurs can leverage the success of an existing business and build on it to achieve their vision.
