The Untapped Opportunity of Entrepreneurship-by-Acquisition

Every day, Emmanuella (Ella) Nweze, MMA’23, brings a relentlessly entrepreneurial energy to her work as president and co-owner of Paris, Ont.-based Apogee Ceramics. As a systems thinker with a knack for data (and a Master of Management Analytics from Smith School of Business under her belt), she loves applying digital tools to modernize legacy ways of doing things at the company, which manufactures advanced infrared ceramic plaques used in industrial, commercial and residential heating applications. She’s motivated by her responsibility to provide fulfilling work and good employment to the dozens of people on her team. She’s energized by the company’s growth—an impressive 10 per cent in the past year—and excited to expand its client base into new verticals, such as aerospace, medicine and defence.

Nweze didn’t start Apogee. It was 19 years old, with a proven business model and a well-established customer base, when she and her business partner acquired it from its founders last year. But there’s no question that she’s leading the company’s future with the passion and drive of the most fervent founder. “When the opportunity to acquire the company came, I had a clear vision that I could leverage what worked in this business and optimize and grow it into something meaningful and impactful,” she reflects. “I was always interested in entrepreneurship, but I defined it as founders ideating something new and growing it from the ground up. My definition has evolved.”

Nweze is part of an emerging wave of businesspeople recognizing the rich opportunity—and material benefits—of entrepreneurship-by-acquisition; In fact, she believes so strongly in the path of buying and growing an existing business that she recently partnered with Cynthia Egbunonu, EMBAA’12, a team coach at Smith; and Patrick Egbunonu, EMBAA’15, an adjunct lecturer at Smith, to start Cyntell Advisory Inc., which helps other professionals navigate the process.

Entrepreneurship-by-acquisition is not a new concept, but recent demographic and economic shifts are making it more appealing for the many savvy, business-minded folks who don’t want the hustle and grind of building something from scratch. “We’re seeing huge interest in acquisition right now,” confirms Elspeth Murray, an associate professor and director of the Smith’s Centre for Entrepreneurship, Innovation & Social Impact. “For people with entrepreneurial tendencies, it is a really, really hot area.”

Here’s why experts say entrepreneurship-by-acquisition is one of the richest untapped opportunities in Canadian business today.

A tsunami of promising prospects

Would-be acquirers of established businesses have plenty to choose from. As baby boomers reach retirement age, it’s sparking what some are calling a “silver tsunami” of entrepreneurial succession. According to Canadian Federation of Independent Business projections, 76 per cent of Canada’s business owners plan to exit their businesses in the next six or seven years, which translates to an estimated $2 trillion worth of assets changing hands in a relatively compressed period of time.

Some of these businesses will be bought out by private equity firms or other institutional investors. Some will transition to employee ownership. Some will shut down. But many will find new life under the stewardship of new owners of all different backgrounds, inclinations and aspirations.

“We are approaching a situation in which there are more businesses coming on the market than there are buyers,” says JP Shearer, associate director of the Smith Centre for Entrepreneurship, Innovation & Social Impact. These aren’t always the flashiest businesses, he explains, but they tend to have rock-solid fundamentals via consistent recurring revenue streams, long-term contracts, steady (if sometimes slow) growth and experienced teams. They also tend to benefit from fresh leadership who can build on what works by injecting new energy and vision. “This is a real opportunity,” Shearer says. “And it is, largely, hiding in plain sight.”

An accessible on-ramp

No matter what form entrepreneurship takes, it’s risky business. (The original French definition for the word “entrepreneur” literally translates to taking on or doing something yourself.) Some 30 per cent of new businesses fail in the first two years; only one-third make it to the 10-year mark.

Shari Hughson knows this well. As a serial entrepreneur—most recently in the social impact space—she has both started businesses from scratch and bought them from others. In her view, the latter is far more conducive to peace of mind. “I’ve been on both sides,” says Hughson, a continuing lecturer at Smith. “Simply put, acquisition is a safer way to build a business than starting with little more than an idea.”

While many businesspeople like the idea of owning an enterprise and are drawn to the perpetual problem-solving of the job, not all have the risk tolerance, time or connections—not to mention the great ideas—to grow something from the ground up. (Indeed, some 55 per cent of Canadian adults who participated in 2023 Global Entrepreneurship Monitor research cited fear of failure as the reason they would not start a business.) For such individuals, acquisition presents a much smoother on-ramp to business ownership. “Starting a business is a lot,” Shearer says, pointing to the many uncertain questions that come with founder life: When should a founder go all-in? How long will it take to find customers? What are the odds of failure? “If you buy a pre-existing business, a lot of that is already settled,” he says.

This relative security carries practical benefits too, Shearer adds. Many banks and other lenders prefer backing the historical data and predictable clientele of established businesses to the ambiguities of investing in an unproven idea from the start. “The trained racehorse is generally safer to bet on,” he says.

A path with purpose

For Kelsey Snow, AMBA’11, acquiring a business has been a far more personal, and rewarding, journey than she ever would have expected.

Snow started dancing at the Edmonton Dance Factory (EDF), a studio located in the south end of the city, when she was three years old. As she got older, she started teaching and choreographing at the school, practices she kept up as she finished her undergraduate degree, got married, had two kids, completed a Smith MBA and built a promising career as a manager for a national home furnishings retailer. “Over time, it became like a second home for me,” she says.

A decade ago, Snow opted to leave her corporate career to help manage EDF. “I wanted to be a part of the future of the studio in a different way, other than teaching,” she recalls. As she got deeper into the mechanics of running the business, she found an unexpected calling. After working out a transition plan with the founder, a long-time mentor, she bought the company in 2024. “Acquisition just felt right to me,” she says. “I knew it was a trusted brand. I knew it had a loyal community. And I knew it had systems that were working.”

That foundation gives her breathing room to lead EDF in a way that she describes as “ownership with purpose,” developing plans and programs that both serve students and her own strengths as a community-builder. “My job is not to make the studio matter, but to continue something that already matters to people, myself included,” she says. “That is really important to me. I love being the person that now gets to shape the vision for the studio’s future.”

As someone who long considered her future to be in the corporate world, Snow would like others who think entrepreneurship is out of reach to reconsider their view. “I think acquisition is a huge opportunity, and one that is under-considered and under-valued,” she reflects. “People don’t always realize that it can be a stable entry point to entrepreneurial life, when done well and with a solid transition plan.” As her own experiences attest, new owners tend to blend fresh energy for the future with respect for what has been built, which is a combination that can unlock all manner of business value and personal fulfillment: “It can be really powerful.”

Snow’s outlook aligns with that of Nweze at Apogee Ceramics. “I encourage people interested in business to broaden their view of what entrepreneurship can look like,” she says.

While acquisition is no walk in the park—it requires, among other skills, financial literacy, operational acumen, due diligence and, often, the change-management prowess to introduce improvements in a culture you didn’t create—Nweze believes it offers entrepreneurially-minded individuals an effective way to make a real difference. “You don’t have to start from zero to build something that is truly impactful.”