Why Start from Scratch? The Case for Buying a Business

"Learn from the mistakes of others. You can't live long enough to make them all yourself." — Eleanor Roosevelt

This past week, I attended Futurpreneur’s Owners Wanted workshop in Owen Sound. Our entrepreneur-in-residence, visiting from Vancouver, walked us through the ins and outs of buying an existing business. It was refreshing to simply be a participant and soak up the potential implications of the “silver tsunami,” which refers to the upcoming wave of business exits as baby boomers prepare to retire. 

There are 3.5 million entrepreneurs in Canada. Between 700,000 and 1 million of them are expected to want to sell their businesses within the next five years. Yet over half of those owners say their biggest challenge is finding a buyer. That’s a lot of businesses in need of new energy. Less than 10% have a succession plan in place.*

For the right person, this presents an open door. It’s a chance to acquire a business with established customers, systems, and a strong reputation.

Here are some key takeaways from the workshop:

1. Know your must-haves and must-avoids. Are you looking for a fixer-upper to grow and evolve? Or are you more interested in maintaining what’s already working with minimal disruption? Clarity here can save you from buyer’s remorse.

2. How much cash can you gather? Most acquisitions require real money up front. While stack financing (layering loans from different sources) is an option, you’ll still need some of your own funds—typically at least 10%. Your credit health will matter. A lot. Deals can take anywhere from 6 months to 3 years to complete, and your ability to secure financing is central to the whole thing.

3. Don’t just search—hunt. Sure, there are plenty of online directories like Hardbacon’s list and platforms like Village Wellth that streamline the process. The facilitator made a compelling case for taking the proactive route. He suggested approaching business owners directly, especially those with a few grey hairs. The best deals may never hit the open market.

4. Trust comes first. Whether it’s through a broker or direct outreach, building a relationship with the current owner is step one. This is not a quick sprint. It's a slow dance. You’re getting to know someone who’s emotionally invested in what they’ve built.

5. Legacy matters. Most owners don’t just want a cheque—they want to know their life’s work is in good hands. Approach with curiosity and respect, not as a shark circling the waters.

6. You’ll need to open the books. Once a relationship is established and mutual interest is clear, you’ll be asked to sign a non-disclosure agreement (NDA) and review the last three years of financial statements. This is when a good accountant becomes your best friend. We explored key valuation metrics like EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and SDE (Seller’s Discretionary Earnings). Here’s a solid article on the topic.

7. Don’t outsource your curiosity. Yes, get an accountant. But don’t leave all the detective work to them. Keep a notebook of questions: Who are their biggest customers? What’s included in the sale? Why is inventory unusually high? The goal isn’t interrogation—it’s insight.

8. Buying a business is part science, part gut check. Get the numbers. Trust your instincts. If something feels off, don’t ignore it. Falling in love with a business can cloud your judgment. Bring in your lawyer and accountant to keep you grounded.

9.  Case Study: Camila the Baker. Camila** had been running a successful home-based baking business for years but was burning out. She considered opening a storefront—until she stumbled upon a local bakery whose elderly owner was looking to retire. The numbers weren’t great on paper, but something about the place called to her.

She followed her gut and initiated a conversation. Over coffee and months of casual meetings, trust was built. The owner opened up his books and Camila brought in her accountant. Turned out the financials were cleaner than expected once personal expenses were filtered out. Camila negotiated a fair price, secured a stacked business loan (from two lenders) and asked the owner to stay on for three months. Today, she runs the bakery and still uses a few of his old recipes.

10. Bonus tip: keep the seller around. If possible, negotiate to have the former owner stay on as a mentor for a few months. This transition period is gold. Observe, ask, absorb. Don’t rush to make changes. There will be time for that.

This workshop was a refreshing reminder of an often-overlooked path for entrepreneurship.

Buying a business doesn’t just save you from startup pains—it gives you a head start with built-in wisdom that would take you years (and likely a few painful lessons) to earn on your own. No school teaches this. Experience does.

* Source: CFIB Canada, Small Business Report, 2022

**Name has been changed to protect confidentiality.

Words of wisdom from Futurpreneur's Vancouver-based Entrepreneur-in-residence

Futurpreneur's Entrepreneurship Coaches: Smarter Now Because We Weren’t Then!