Think Big, Buy Small
Business ownership in Canada is undergoing a notable shift due to demographics and difficult market conditions. Based on Statistics Canada data, the Canadian Chamber’s Business Data Lab (BDL) estimates around 54,000 Canadian businesses, representing 4% of all businesses, are currently up for sale. This significant figure presents a unique opportunity for aspiring entrepreneurs.
Small businesses make up most of the businesses for sale in Canada. Acquiring a small business offers younger graduates and entrepreneurs a way to step into an established operation with an existing customer base and operational framework, significantly reducing the risks associated with starting from scratch.
While numerous organizations across Canada are dedicated to helping people launch new ventures, there remains a gap in support for those looking to acquire existing businesses. Entrepreneurship Through Acquisition (ETA) is an underappreciated strategy where individuals or groups purchase and manage established companies rather than starting new ones from scratch.
ETA not only saves businesses from potential closures but also stimulates economic growth by revitalizing existing enterprises with fresh ideas and capital. Younger graduates and entrepreneurs, with their innovative ideas and tech-savviness, are particularly well-positioned to modernize and expand these businesses. A survey by Relay Investments found that 88% of firms acquired through a form of ETA in the United States created jobs, with 46% more than doubling their headcount post-acquisition.
In the United States, the trend of buying small businesses has gained significant traction, with influencers like Codie Sanchez (@Codie_Sanchez) leading the charge. Sanchez, an advocate of the “boring business” acquisition model, highlights the immense potential and stability offered by established small businesses. This approach has resonated with many aspiring entrepreneurs who see the value in investing in existing operations rather than facing the uncertainties of starting anew. The success stories emerging from this trend in the U.S. serve as an inspiring blueprint for Canadian entrepreneurs considering ETA as a viable and profitable path.
To bridge Canada’s ETA support gap, Venture for Canada (@Venture4Canada) is launching a pilot ETA program in 2025 to equip new and seasoned entrepreneurs with the essential skills, knowledge, and mentorship needed to successfully acquire and revitalize small businesses. Younger graduates and entrepreneurs, can seize this moment to transform a small business into a big success story, ensuring not just the survival of these enterprises, but also the growth of the Canadian economy.