Buy a $500K/Year Income Stream? This Is How to Do It

**Dave Meyer** (0:00)
What if today, you could buy a $500,000 per year income stream? You could replace your salary, you could become the boss immediately, and you could reach financial freedom faster. You're probably thinking to yourself right now, Dave, that sounds impossible, but today's guest proves that the average American, yeah, even you, hearing this right now, can get in on the action. It is not a gimmick, it is not a scheme. It's actually kind of boring and it's transparent. And it's something I'm actually considering doing myself very soon. It's buying a small business. If you own or want to own rental properties, our industry is actually kind of similar to buying small businesses. In our industry, you buy a property, you get it rented, you run it well, profit and repeat, similar with small businesses. But these small businesses are sort of like rental properties on steroids, at least in terms of how much cash flow they can generate. And just like rentals, you don't actually need to put in all the cash upfront to buy them. Buying just one of these businesses could actually replace your salary. And today, we're showing you exactly how to do it.
What's up, everyone? I'm Dave Meyer, Chief Investment Officer at Bigger Pockets. Today, we're talking about buying small businesses with Will Smith, host of the Acquiring Minds Podcast. Of course, you're probably thinking, and it's true, this is a real estate podcast. I myself am a real estate investor.
But buying small businesses has emerged as a popular alternative, or I would argue as a popular complement to real estate investing in recent years. So I wanted to have this conversation with Will and share it with all of you. Let's bring him on.
Will, thanks for joining the Bigger Pockets Podcast. We're excited to have you here.

**Will Smith** (1:53)
Dave, thrilled to be here. Know the podcast. I've known it for years.
So it's really exciting for me.

**Dave Meyer** (1:59)
Well, let's just start by hearing a little bit about your background and how you first got into the world of investing, personal finance, wealth building, all that.

**Will Smith** (2:09)
So I've pretty much for my whole career been an entrepreneur of some kind, mostly doing my own businesses for the first few chapters of my career, and then my most recent and probably final W-2, I was living in the Bay Area and working for a couple of startups, but had that entrepreneurial itch that just never seems to go away with me, but didn't at that time have a business idea that I wanted to run after. So I had the energy, but not the idea. And that was when I discovered the possibility of buying an existing business, which is what we're here to talk about.
And I can kind of give the origin story of Acquiring Minds in a minute, but I guess to answer your question directly, have always been entrepreneurial, have always been interested in ways to build businesses, and as a consequence of that, build wealth.

**Dave Meyer** (3:06)
So Will, tell us what is ETA?

**Will Smith** (3:09)
ETA, Entrepreneurship Through Acquisition, also known sometimes as search or search funds, you might have heard of, is the idea of becoming an entrepreneur or business owner by buying an existing business, as opposed to starting one from scratch. There is a lot of excitement around this path in the last 20, but especially in the last five years. Business schools are teaching this. A lot of people are coming from tech or finance and wanting to get out of those industries and become entrepreneurs, and this is a path to do it. There are demographic trends of a lot of retiring 60 and 70 somethings whose businesses need new ownership. So there's a lot of trends that are contributing to this, not to mention the model itself is really compelling. So you can buy a small business with leverage, with an SBA loan in the US, but there are also ways to do it with leverage in other markets, non-US markets.
So you don't have to stroke a check and buy the entire thing. Like in real estate, you have a down payment of 10, 20% and can buy a multi-million dollar business. And even for that 10 or 20%, you can raise investor equity to help you get there.
So the economics are really compelling as well as a number of other trends that are sort of converging to make this a really exciting path. And then people like me and many other podcasts talking about it all the time. So raising the awareness of it as well.

**Dave Meyer** (4:40)
What made you feel like you could do it, Will? Because I wanted to be entrepreneurial too and I was first out of college trying to figure it out. It never crossed my mind that I could buy a business. And I think a lot of people feel that way about real estate too. They don't realize that there are ways to get into real estate that don't require as much money as you might think. My assumption was that small business was the same way.