The Strategy Skills Podcast: Strategy | Leadership | Critical Thinking | Problem-Solving cover image

The Strategy Skills Podcast: Strategy | Leadership | Critical Thinking | Problem-Solving

485: HBS Professors and 'Think Big, Buy Small' Hosts Richard Ruback and Royce Yudkoff on Entrepreneurship Through Acquisition

Sep 23, 2024
Richard Ruback and Royce Yudkoff, both esteemed professors at Harvard Business School, explore the intriguing landscape of entrepreneurship through acquisition. They discuss how retiring baby boomers are reshaping business sales and the unique challenges buyers face in this climate. Insights on finding the right businesses, evaluating them, and common mistakes abound. They also dive into financing options, emphasizing the advantages of SBA loans. This conversation blends academic expertise with practical advice for aspiring entrepreneurs.
58:24

Podcast summary created with Snipd AI

Quick takeaways

  • High interest rates are affecting business acquisition financing, imposing tighter loan covenants and limiting options for potential buyers.
  • A significant demographic shift, as baby boomers retire, is driving increased competition among buyers looking to acquire small businesses.

Deep dives

Impact of Economic Trends on Acquisitions

High interest rates significantly affect the financing of business acquisitions, making loans more expensive and limiting the options available for prospective buyers. Small business administration loans and commercial loans are commonly used, but rising rates tighten covenants, creating added pressure on buyers. Concurrently, a demographic shift occurs as many baby boomers age, leading to increased motivation among small business owners to sell. This trend intensifies competition among buyers looking to acquire businesses from a wave of retiring entrepreneurs.

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