Entrepreneurship Through Acquisition: Finding Your Right Industry
Chris Barrett
Introduction
When you begin your journey toward buying a small business, it’s easy to get caught up in the latest trends, or to think you need to follow whatever the latest tech startup or industry favored by private equity is. The truth? Opportunity is everywhere. Right in your hometown, small business owners are running laundromats, roofing companies, bakeries, plumbing services – and generating wealth. They aren’t succeeding because they all got swept up in the latest industry hype: they’re succeeding because they chose the right business for their particular skill set.
Entrepreneurship through Acquisition (ETA) offers a unique path to ownership, and the key to success lies in finding the right industry for you.
Factors to Consider When Choosing an Industry
In entrepreneurship through acquisition, selecting the right industry is just as important as finding the right business. Execution matters, but doing so in a sector that suits your strengths amplifies your potential.
1. Personal Alignment
Choose a business that resonates with your skills, interests, and values. You’ll be spending significant time solving challenges—make sure they’re ones you can understand and handle. Ask yourself questions like:
Do you enjoy managing people, or working behind the scenes?
Are you passionate about logistics, food, or service?
Do you prefer physical labor, or digital problem-solving?
2. Market Dynamics
Understand the growth potential, stability, and demand within an industry. Every business acquisition inherently carries risk, but you can look at the specific factors of different industries to better prepare for the challenges that might be presented.
Is the industry recession-resistant?
Are new competitors entering or exiting frequently?
What are the projected trends over the next 5-10 years?
3. Financial Considerations
As you analyze profit margins, cost structures, and revenue models for your industry, keep in mind the following:
Can the business scale?
How much working capital is required?
Are there hidden costs like licensing, inventory, or compliance?
4. Lifestyle Implications
Your chosen industry will shape your daily life. Not every industry is a 9-5 with a set office. You should always consider:
Does the business require late hours or weekend operations? When is the busy season, and what does that look like for hours?
Will I need to travel often, either nearby or further away?
Is it labor-intensive or automated? What kind of work will I be doing, and does that suit who I am?
Researching Potential Industries
Start with Data
Dive into industry reports, market insights, and business-for-sale platforms to get a macro view. Read through trade publications and economic forecasts, and listen to podcasts such as Acquiring Minds. Look for local Small Business Association (SBA) resources – often found locally at town and city halls, libraries, and online. Don’t forget to leverage the power of the internet, with sites such as IBISWorld, Statista, or BizBuySell.
Leverage Your Network
Speak with small business owners, workers, and mentors who operate in industries you’re curious about. Their practical insights are often more valuable than formal reports. They can offer insights more specific to your location, and can answer questions with more detail when it comes to the qualitative aspects of the business such as customer dynamics, what the busy season really looks like, and how often you can be expecting to put in those overtime hours and why. They may have even gone the entrepreneurship through acquisition route themselves, and can offer more insight on how they chose their current industry.
Be Honest With Yourself
There will be a lot of numbers, many options, and plenty of opinions about the best industry or the “surefire shot” as you research. Keep in mind what your skillset really is, and what you are actually willing to work on and do. Knowing the jobs that you don’t like can be just as important – what previous experience do you have that wasn’t the best fit for you? How can you avoid ending up there again? Make sure you don’t buy yourself into a situation where you’ll be sitting at a desk all day if that’s something you’re trying to leave behind.
Making the Final Decision
Perform a SWOT Analysis
Assess the Strengths, Weaknesses, Opportunities, and Threats in your top industry choices. This adds objectivity to your passion-driven decision-making.
Mitigate Risk with Strategy
Identify barriers upfront—be it legal compliance, staffing, or customer churn—and prepare a plan to address each.
Seek Expert Advice
Consult business brokers, industry specialists, or ETA mentors who can help validate your choice and flag unseen issues.
Conclusion
You don’t need to chase the hottest industry. Some of the most profitable acquisitions are in overlooked everyday niches. The most successful entrepreneurs through acquisition are problem-solvers who find the right fit for their skill set and passion.
Watch The Video: How Much Does Industry Matter?
You can watch our related video “How Much Does Industry Matter When Buying a Business?” by clicking here.
While you’re there, don’t forget to check out our other content to help you with every aspect of your business journey.
Frequently Asked Questions
Yes—if you’re coachable and hire or partner with experienced managers. Still, aligning your strengths makes success more sustainable.
Unfortunately, there isn’t a set answer for this one. Some businesses can be acquired with as little as 5–20% down using SBA loans or seller financing. Other industries will require more.
Again, there isn’t an easy answer here. Service-based businesses like HVAC, laundromats, and home care often have low overhead and strong margins – but they can often be labor dependent and/or seasonal. Manufacturing often has high margins, but can be complex and require high capital. Retail offers potential for brand building, but will follows the shifts of the market. Tech frequently offers high growth and more easily scalable solutions, but requires a lot of technical expertise, and some sectors have very strong competition in a fast-changing environment.
Disclaimer
The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting, or investment advice. You should consult a qualified legal or tax professional regarding your specific situation.
