The New Route to Entrepreneurship: Taking Over a Profitable SME

For decades, entrepreneurship has been portrayed as synonymous with starting from scratch: building a product, raising capital, chasing growth, and accepting a high probability of failure along the way. That model still has its place. But for a growing number of professionals, this is no longer the most attractive, or rational, path into business ownership.

An alternative, however, has been gaining momentum: Entrepreneurship Through Acquisition (ETA). Rather than building a company from zero, ETA involves acquiring an established, cash-generating business and stepping in as its new owner-operator. The potential is clear to many buyers: existing revenue, established demand, and the opportunity to take on a leadership role immediately.

What is changing is not the existence of this model, but its relevance. Millions of small and medium-sized businesses across the U.S. are approaching a generational handover, many of these businesses being verifiably profitable, locally embedded, and operationally essential. However, they face an uncertain future simply because their founders are ready to step back. At the same time, a cohort of professionals is rethinking traditional career paths and looking for a more direct form of ownership, autonomy, and long-term value creation.

ETA sits at the intersection of those two forces.

One person who has seen how this model works beyond theory is Khaled Abu-Suud, whose background in private equity shaped how he thinks about ownership, operating quality, and value creation. With years of evaluating professionally run businesses at scale, he’s gained a clear view of the premium the market places on institutional discipline and, by contrast, how much commercial upside often remains in founder-owned companies that have never been fully professionalised.

His work now focuses on supporting the next generation of operators at Kodiak, applying those same principles of structure and judgment to a segment of the economy where they have historically been underapplied.

Kodiak: Working to Make a New Path To Entrepreneurship Easier To Access

Kodiak sees the ETA model as a potentially appealing option for first-time business owners: the chance to step into established companies with consistent earnings, existing customer relationships, and a documented operating history.

Yet access to these opportunities remains deeply fragmented. Millions of aging business owners are looking to exit without formal succession plans, while prospective buyers often approach the market with uneven levels of preparation, experience, and support.

Kodiak was founded to introduce structure into this environment by pairing disciplined evaluation with careful operator selection. The firm seeks to identify high-integrity, strategically minded entrepreneurs and support them through what they describe as a consistent, repeatable assessment framework. This should allow operators to move decisively in a market where sellers tend to prioritise certainty, continuity, and the right long-term steward for their businesses.”

Rather than acquiring businesses directly, Kodiak intends to work alongside entrepreneurs pursuing specific acquisition opportunities, providing underwriting and structuring support informed by repeated exposure to high volumes of transactions and experience evaluating businesses at more mature stages of their development. This approach should give first-time CEOs access to a level of judgment, pattern recognition, and transaction rigor – alongside a growing network of operators, advisors, and practitioners – that would otherwise be difficult to develop independently.

Through this model, Kodiak supports entrepreneurs as they step into ownership while preserving their autonomy as future leaders of the businesses they acquire. The broader objective is to introduce rigor and repeatability into a historically fragmented part of the entrepreneurship landscape – what Abu-Suud describes as “a way for capital to finally scale across ETA with real rigor.”

Khaled’s Journey To Kodiak

Khaled’s path to ETA was shaped less by a single moment than by accumulated exposure to how value is created – and sustained- in well-run businesses. During his time in private equity, he evaluated companies across a wide range of sectors and stages, observing how operating quality, governance, and discipline compound over time.

Working primarily with mature, professionally run businesses gave him a clear reference point for what institutional standards actually look like in practice – and how the market often values companies that combine strong fundamentals with consistent operating and reporting systems. It also highlighted how value creation is rarely about reinvention, but about sharpening pricing, improving processes, allocating resources more deliberately, and reducing avoidable risk.

Over time, this perspective sharpened his interest in founder-owned businesses that had been built carefully over decades but had never fully institutionalised their operations. Not because they lacked quality, but because the absence of structure often limited their ability to grow, transition, or attract long-term ownership.

ETA offered a way to apply those lessons directly. Rather than observing outcomes from a distance, Abu-Suud saw a way to help operators step into ownership with clearer frameworks for underwriting, structuring, and – critically – value creation, grounded in the realities of running businesses through different economic cycles.

As he describes it, “The work I’ve done has given me a clear sense of what actually drives value over time. Kodiak grew out of the idea that those same principles could be applied earlier, with a real impact on how these businesses evolve under new ownership.”

A Promising Yet Still Overlooked Proposition

The framework Khaled developed through his earlier work helped clarify his assessment that the ETA model remains underappreciated despite its scale. As millions of baby-boomer owners prepare to retire, a large volume of profitable, locally embedded businesses are entering a transition phase – often not because of operational weakness, but because ownership itself is changing.

What remains misunderstood is how accessible ownership can be when businesses already generate stable cash flow, serve essential functions, and operate with long-standing customer relationships. For many professionals, the barrier is not opportunity, but the absence of structure, guidance, and credible frameworks for evaluating and executing these transitions.

From an investment perspective, the disconnect is equally pronounced. Strong businesses frequently come to market with limited institutional preparation, while buyers with the right operating mindset often lack the support systems needed to assess risk, structure transactions, and plan for value creation. The result appears to be a persistent mismatch between quality assets and capable successors.

“I think this market is overlooked,” he explains. “We see a steady flow of established businesses coming to market, many with real latent value creation opportunities. Yet compared with other markets, we’ve seen far fewer institutional buyers than we expected.”

Kodiak seeks to sit squarely at that intersection. By pairing disciplined evaluation with operator-focused frameworks, the platform is designed to help turn what might otherwise be fragmented, one-off transactions into repeatable pathways toward long-term ownership. In doing so, it seeks to make ETA not just viable, but navigable – and to surface value that often goes unrealised during generational transitions.

A Guide To The ETA Model

Khaled and his partners’ work at Kodiak reflects a set of principles that can contribute to effective outcomes in ETA. While no two businesses are identical, certain patterns can recur across transactions where ownership transitions are executed well.

Operator Quality Over Credentials

Strong operators come from many backgrounds, but Kodiak believes that formal credentials matter far less than judgment, preparation, and the ability to reason through complexity. Kodiaks’ thesis is grounded in the premise that most effective owner-operators demonstrate a clear understanding of how the business actually works — where risk resides, what drives performance, and which decisions will matter most in the first years of ownership.

The Power of Simple, Essential Businesses

Many of the most compelling opportunities sit in businesses that are operationally straightforward but economically critical. Companies with recurring demand, predictable cash flow, and a clear role in their local economy often provide a more durable foundation for ownership than more complex or speculative models.

Professionalisation as a Key Value Lever

In many cases, value is created not by changing what a business does, but by improving how it does it. Clearer governance, better reporting, more disciplined pricing, and modest technology adoption can materially improve resilience and performance without disrupting the core operation.

Stability With Identifiable Upside

Kodiak favors acquisitions that combine a stable baseline with specific, actionable levers for improvement. These may include procurement efficiencies, capacity utilisation, service mix optimisation, or more deliberate capital allocation. The goal is not aggressive expansion, but thoughtful compounding.

Structure and Support Matter

Ownership transitions are inherently complex, particularly for first-time operators. Access to disciplined underwriting, sound transaction structuring, and experienced guidance can reduce avoidable risk and allows operators to focus on running and improving the business rather than navigating uncertainty alone.

For Khaled Abu-Suud, the strength of the ETA model lies in how it can elevate entrepreneurial talent by placing them at the helm of resilient businesses during a rare generational moment: “ETA thrives on entrepreneurs. And there’s simply no country more supportive or more fertile for people who want to own and build enduring businesses.”

Disclosures:

This article is provided for informational and background purposes only and is intended to describe the professional experience, leadership approach, and general investment philosophy of Kodiak and its leadership team. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or investment advisory services.

The views expressed are general in nature and should not be relied upon as investment advice. Investment strategies and processes involve risk and do not guarantee future results.