Review: The HBR Guide to Buying a Small Business

Unlock the Fast Track to Entrepreneurship by Buying an Existing Business

There’s a weird little corner of the entrepreneurial world that probably isn’t talked about enough: buying a small business. That’s right — buying one, not starting one or climbing the corporate ladder. Enter the HBR Guide to Buying a Small Business by Richard S. Ruback and Royce Yudkoff, which is basically a cheat code manual for the whole “own your own business” thing. Here’s what their schtick. And it’s worth taking note of:

1. Entrepreneurship Through Acquisition (ETA): The “Secret” Door

If you’re like me, you probably thought there are two ways to become a business owner:

1. Build a business from scratch. The “start-up” (risky, takes forever, might fail spectacularly).
2. Work for someone else until you get old and cranky and maybe even a gold watch. (predictable, but yawn).

But ETA is the secret third door: buy an existing, already-working, already-profitable business. You skip the awkward startup phase where you eat ramen every night, and you jump straight into “steady cash flow” territory.

Why it’s awesome:

• Money! You’re buying something that already makes money, and you can grow it.
• Fast Track: You get to skip the “throwing spaghetti at the wall to see what sticks” phase.

2. The Perfect Profile for a Buyer

You don’t need to be a corporate overlord with an Ivy-league MBA and a private jet to pull this off. Actually, most buyers are middle-management types with decent decision-making skills and a healthy appetite for risk. Think “resourceful, resilient, and moderately obsessed with spreadsheets.”

Good news:

• You don’t have to be a CEO or a genius.
• If you’ve led a team, crunched numbers, or survived a really bad boss, you’ve got transferable skills.

3. The Power of Dullness: Seek Boring but Profitable Businesses

Let’s play a game. Which business would you buy?

• A super sexy startup with AI, NFTs, and an influencer CEO?
• A plumbing supply company that’s been around since 1985?

If you said “plumbing supply,” you win. Here’s why: Boring businesses are predictable, stable, and have customers who stick around. You’re not trying to invent the next big thing — you’re stepping into a system that already works.

Pro Tip: Avoid industries where people are too excited. Excitement usually means “risky” or “burns out in five minutes.”

4. It’s a Process, Not a Lottery Ticket

Buying a business isn’t like picking out a new couch. It’s more like dating, except instead of looking for someone who likes long walks on the beach, you’re looking for:

• Recurring revenue.
• Stable cash flows.
• An owner who’s actually ready to sell (not just “thinking about it”) Retirement is the favorite reason.

Here’s the playbook:

• Define your goals: What kind of business fits your life?
• Search smart: Use brokers or just start calling business owners like the bold go-getter you are.
• Do your homework: This is where you make sure the numbers aren’t lying to you. Do the due diligence.

5. Money Stuff: How You Pay for This Thing

Here’s the good news: you don’t need to have all the cash upfront. Most buyers use a mix of:

• Debt: Like loans from banks or the Small Business Administration (SBA).
• Equity: Aka “Hey, rich friends and family, want to invest in my future?”

The key is not to overpay. If the seller wants $1M for a business making $50k a year, run. Fast.

6. Minimize Risk Without Becoming a Boring, Risk-Averse Blob

Buying a business is kind of risky, but there are ways to play it smart:

• Pick stability: Established businesses with a track record.
• Brace yourself: Dead-end leads and frustrating negotiations are part of the game.

Expect some emotional turbulence. Buying a business is like a roller coaster — except instead of a safety harness, you’ve got a pile of legal paperwork. And disappointment.

7. Why It’s Worth It: The Feels

Yes, you’re buying a business to make money, but let’s talk about the feels.

• Control: You’re the boss. No more “circle back emails” from Karen in HR.
• Impact: You’re running the show, making decisions, and maybe even creating jobs.

There will be moments when you’re on top of the world, and moments when you want to crawl into a cave. That’s normal. Embrace the chaos.

8. Fulfillment: The Cherry on Top

Imagine this: You’re running a business you love. You’re building a legacy. People rely on you for their paychecks, and you’re growing something meaningful. That’s the dream. And unlike the startup path, you don’t have to wait 10 years to see results — you’re making an impact now.

Could this be Your Path?

The HBR Guide makes it clear: buying a small business isn’t for everyone. You need guts, patience, and a strong stomach for a lot of bullshit. But for the right kind of person, it’s an insanely rewarding way to gain financial independence and live life on your terms.