After a number of earlier business failures, entrepreneur Thabo Sikukula chose a different route into ownership than starting another venture from scratch, buying an already profitable timber manufacturing plant instead. Choosing to grow an existing, proven operation rather than build a new one from nothing gave him a working business with real customers and cash flow from the outset, rather than the years of uncertainty a fresh start-up typically requires before reaching that same point.
Buying an existing, already profitable business is a route into ownership many aspiring entrepreneurs overlook entirely, defaulting to starting from scratch without seriously weighing the alternative.
An existing business provides an immediate operating foundation
A profitable business being acquired already has customers, established processes and proven cash flow, which removes much of the early uncertainty a founder starting completely from scratch has to work through before reaching the same point, if they reach it at all.
Transparency with stakeholders builds trust through a transition
Being genuinely transparent with employees, suppliers, customers and funders through an ownership transition, rather than managing the change quietly or defensively, builds the trust needed to retain the relationships that made the business valuable and profitable in the first place.
Shared ownership can align incentives through the transition
Structuring a deal so key people involved in the business have a genuine stake in its ongoing success, rather than remaining purely employees with no ownership interest, helps align incentives during the transition period when uncertainty about a new owner’s approach could otherwise unsettle a previously stable operation.
A successful acquisition often leads to further ones
An entrepreneur who successfully grows one acquired business often develops both the confidence and the track record to pursue further acquisitions in adjacent industries, treating strategic buying, not only building from scratch, as an ongoing part of a genuine growth strategy rather than a one-time alternative path.
Buying a company means taking on its filing history and liabilities, so its record with the Companies and Intellectual Property Commission should be checked before anything is signed.
Frequently asked questions
Why might buying an existing profitable business be preferable to starting one from scratch?
Because it comes with existing customers, established processes and proven cash flow already in place, removing much of the early uncertainty a start-from-scratch founder has to work through before reaching that same point.
Why does transparency with stakeholders matter so much during a business ownership transition?
Because it builds the trust needed to retain the employees, suppliers and customer relationships that made the business valuable in the first place, which a quiet or defensive transition risks undermining.
Does giving key people a stake in the business actually help during a transition?
Yes, it helps align incentives during a period when uncertainty about a new owner’s approach could otherwise unsettle a previously stable operation, since those with a genuine stake are more invested in a smooth transition succeeding.
Does a successful acquisition typically lead to further ones?
Often yes. Entrepreneurs who successfully grow one acquired business frequently develop the confidence and track record to pursue further acquisitions, treating strategic buying as an ongoing growth strategy rather than a one-time alternative.
Is buying an existing business a realistic option only for experienced entrepreneurs?
Not exclusively, though prior business experience, including from earlier ventures that did not succeed, can genuinely inform better judgement about which existing businesses are worth acquiring and how to manage the transition well.
Originally published in March 2017. Updated September 2026 to draw out the transferable lessons about stakeholder transparency and shared ownership behind this acquisition story.
