Millionaire’s Shortcut

Why Buying Profitable Businesses Beats Building Them

Most entrepreneurs think like builders. It’s baked into us: Start something. Create from scratch. Find the next big idea and hustle it into existence.

But after decades in business, I can tell you, the fastest path to wealth isn’t building. It’s buying. Or, as I like to say, “There’s just no better investment than going into a business that already exists and has a proven track record.”

Let’s unpack why this works (and why almost no one talks about it).

Why Most Entrepreneurs Are Taking the Long Road to Wealth

Startups have a certain romantic appeal. The vision. The hustle. The possibility of being the next unicorn. But here’s the math nobody likes to admit:

• Most startups fail outright.

• The successful ones take years to turn profitable.

• Even when they win, founders often get diluted or burned out before they can enjoy the upside.

If you manage to survive, great. But for entrepreneurs who want faster results, better cashflow, and scalable wealth? Startups are the slow lane. Instead, consider this:

If you buy into a business that’s already operating at a 30% margin, even with a conservative multiple, you’re already looking at a 30% return on your capital. Warren Buffett would kill for that.

And that’s before you make a single change or improvement.

The Power of Skipping Startup Risks

When you acquire an existing business, you immediately skip the riskiest, hardest phases. No market validation headaches. No cash burn while you build customer trust. No need to hire a team from scratch. No need to spend months (or years) reaching profitability.

Instead, you inherit a business that’s already:

✔ Serving customers.
✔ Generating cashflow.
✔ Paying employees.
✔ Paying vendors.
✔ Proving that the business model works.

Even if you only bought one of those businesses and never did anything else, compounding your money at a 30% return would make you wealthier than almost any other strategy I’ve seen.

Leverage: The Secret Weapon Most Business Buyers Overlook

Let’s address the elephant in the room.

Good news: You probably don’t need it. Right now, Small Business Administration (SBA) loans allow buyers to finance up to 97.5% of an acquisition’s price. You can buy a $6.2 million business for as little as $125,000 down. That’s less than what many people spend on a car.

Plus, many deals also include seller financing. Combine SBA with seller financing, and it’s possible to acquire cashflowing businesses with minimal upfront capital.

Even if you can’t come up with the down payment yourself?

• Private investors.

• Home equity.

• 401k rollovers.

• Angel groups.

All options for finding the relatively small amount of capital you need to control million-dollar businesses.

Cashflow Compounding: The Wealth Engine You’ll Love

Once you own a profitable business, two wealth accelerators kick in.

1. Immediate Cashflow
Most small businesses distribute profits. That means you’re making money right away. Unlike startups or real estate plays, you don’t have to wait for an exit to start seeing returns.

If you buy 40% of a business doing $150,000 in profit, you’ll likely earn around $60,000 annually on a $200,000 investment, a 30% return.

2. Equity Multiplication
Every dollar you add to profit doesn’t just pay once. It increases the value of the entire business. For example, increase profits by $100,000. At a 3X multiple, that adds $300,000 to the business’s valuation.

If you grow the business to $1 million in profit, that could mean a $5 million exit valuation, or more, depending on industry multiples. That’s how small improvements create outsized wealth gains.

Want Even Less Risk? Start with Minority Stakes

Some entrepreneurs don’t want to run an entire company. I get it. That’s why I often recommend starting with minority deals. I prefer, and often recommend, doing a couple of minority deals first. Get cashflow. Learn the ropes. And make sure you like the business before scaling up.

By acquiring 20% to 40% stakes in multiple companies, you diversify your risk, gain multiple income streams, and still retain the option to increase your ownership over time.

Best of all, you don’t end up buying yourself a job.

Stack the Deals, Stack the Wealth

If you do just one deal a year, within five years you could easily own a portfolio worth $10 million or more.

And here’s the best part: the deals get easier as you go.
✅ Better opportunities come your way.
✅ Financing becomes simpler.
✅ Your negotiating power increases.
✅ You can hire managers or CEOs to run the businesses.
✅ You get to focus on strategy, not day-to-day operations.

It’s hard not to get to $10 million in five years if you do this right.

Active Investing: The Scalable Wealth Strategy Most Ignore

Passive investing, stocks, index funds, crypto, has their place. But those vehicles don’t give you control.

They’re lottery tickets, the beauty of acquiring businesses is that you can dictate the outcome. You can grow cashflow, grow equity, and reinvest for faster scaling.

Because for entrepreneurs ready to scale? Active equity is the shortcut most people overlook.

So, stop building from scratch. Stop waiting for stock picks or meme coins to make you rich. Buy businesses. Grow cashflow. Compound wealth. Repeat.

Your future self will thank you.

Thinking About Exiting Your Business?
You’ve built something incredible—now it’s time to make sure you get the most from your exit. We’ve helped countless entrepreneurs maximize their business sales, ensuring they walk away with more than just a deal—they walk away with the best deal possible.

Want to see what’s possible for you? Schedule a complimentary call (click here) today to see how I can help you get the most out of your exit.

Whats Going On

On The Business Lunch Podcast: In this episode, we dive into a viral social media post about management strategies that sparked unexpected controversy. If you're an entrepreneur, business owner, or manager looking to understand how to handle viral content and leverage audience reactions, this episode is for you. — Listen on Apple Podcasts I Spotify 

Free EPIC Challenge: Discover how to buy profitable businesses with no money out of pocket and without taking on expensive loans or startup costs. Our free EPIC Challenge starts on May 13! Sign up here.

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