Small Businesses: A New Era of Ownership

In the United States, a significant change is happening in the small-business world. Many business owners, especially those from the baby boomer generation, are getting ready to retire. This means that a lot of businesses will soon need new owners. These businesses are important because they provide essential services and support local economies. However, many of them do not have a clear plan for who will take over when the current owners retire. Khaled Abu-Suud, a co-founder of Kodiak, a company that helps entrepreneurs buy businesses from retiring owners, has a unique perspective on this issue. He does not see a lack of potential buyers as the main problem. Instead, he believes that the challenge lies in creating the right systems and support structures to make these transitions successful. Many of these businesses have been around for a long time and have strong fundamentals, but they often lack modern systems and professional management. Kodiak focuses on finding businesses that have steady demand and room for improvement. They look for companies with strong local presence, regulatory advantages, and repeat customers. By introducing better systems and management practices, these businesses can become even more valuable. Khaled emphasizes that the success of these transitions depends on the skills and vision of the new owners. Those who can identify opportunities for growth and implement effective strategies will be the most successful.The current economic trends, such as the increasing demand for power, infrastructure upgrades, and reshoring, create a favorable environment for these businesses. Many of these companies have deep technical expertise and long-standing relationships with their customers. By modernizing their operations and introducing new technologies, they can tap into significant growth opportunities. Khaled believes that the strength of the operator is the key to unlocking the full potential of these businesses. As more entrepreneurs explore business ownership through acquisition, the entrepreneurship-through-acquisition (ETA) model is gaining traction. This model involves entrepreneurs buying established small businesses and taking over as the new operators. Kodiak is at the forefront of this trend, supporting a growing pool of operators and evaluating new sectors. The firm aims to make the ETA model more accessible and scalable, providing a clear pathway for the next generation of business owners.