Have you ever dreamt of running your own company? If so, you’ve likely pictured yourself at the helm of a scrappy startup that turns your million-dollar idea into reality. Some aspiring entrepreneurs go on to do just that. For others, the high failure rate of startups makes it just too risky.

But there is another way to run your own company, which our professors say is often overlooked despite being a smarter path for many: entrepreneurship through acquisition. Instead of founding a company, you buy a small business. You still get the challenge of growing and scaling a business, honing your leadership chops, and creating jobs, but there’s less risk involved.

“While acquisition entrepreneurship may lack some of the glamour of a startup, the path of buying a company is far less risky than trying to come up with the next new innovation amid a sea of other entrepreneurs with similar and bright ideas,” writes clinical professor David Schonthal in Harvard Business Review.

Today, we’ll learn more about the advantages of acquisition entrepreneurship.

The Case for Acquiring Instead of Founding

One of the biggest benefits of entrepreneurship through acquisition is that you know the business can work. Unlike startups—where you need to find the right market for your million-dollar idea and a million things could derail you—existing businesses have already passed this hurdle.

“With an existing business … product-market fit is already established. That lowers the risk and brings the added benefit of acquiring a business with cash flow,” writes Schonthal, who is director of entrepreneurship programs at Kellogg.

This was part of Brad Morehead’s reasoning when he opted against founding a home-security company and bought one instead.

“There are lots of ways to be an entrepreneur,” says Morehead, an adjunct lecturer of innovation and entrepreneurship who bought the home-security company LiveWatch. “You can be an entrepreneur with an idea to change an industry, but you don’t have to start from scratch if that doesn’t fit your risk profile.”

Morehead discovered another advantage to acquisition over founding: you can kick the tires a bit before committing, unlike with startups, where founders often want to keep their ideas a secret.

“There’s no reason not to talk to people about what you’re thinking about buying.” Morehead says. “You can get real feedback faster to accurately assess demand risk.”

One of the reasons people aspire to found a startup is to help create jobs. In this case, acquisition is likely the better way to go, Schonthal writes, because small businesses account for most of the new jobs created in the U.S. “For entrepreneurs motivated by the desire to create jobs and support job growth, there’s no comparison between an existing workforce and a small tech startup employing only a handful of people.”

Advice for What to Do Once You’ve Acquired a Company

All of this is not meant to convey that there are no risks to entrepreneurship through acquisition. There are, of course, plenty. And the stakes are high. Not just for you and your investment, but for all the employees you now lead.

Alex Schneider knows this feeling well. In addition to being an adjunct lecturer in entrepreneurship, he is the cofounder of Clover Capital Partners, a private equity firm that specializes in acquiring and investing in small businesses.

After acquiring his first company, he says, “it was like, ‘Oh, I’m now responsible for these people who rely on our business for healthcare, retirement savings, and education for their kids. You may spend months learning about a business beforehand, but once you’re inside, you have a totally different type of accountability than you’ve ever felt when you were working for someone else.”

Here’s some advice on how to make the transition to owner as smooth as possible:

Establish your credibility: This is important right from the get-go, Schneider says. You need to be imparting your vision, as well as explaining your background and motivation for buying the company. He views building credibility as striking a balance between the urge to make wholesale changes and the patience to listen and learn the business from the inside out. Start by identifying small pain points that can be acted on quickly, he suggests, while gaining a greater understanding of the company’s challenges.

Wear your passion on your sleeve: Acquisition may not be as sexy as founding a company, but that doesn’t mean you won’t be jazzed about it. And demonstrating that excitement to employees is key to a venture’s success, Morehead says. “Almost everybody I’ve talked to who has acquired businesses still has passion for what they are doing. It might grow in a different way, at a different speed, over a different amount of time, but you still become extremely passionate about the brands and the teams that you’re now growing.”

Recognize your adaptable employees: New owners are generally met with two types of employees: those ready to embrace change and those happy with the status quo. Schneider says it’s critical to identify those in the first group and then lean on them. “Because you’ve got that long list of to-dos, you’ll have to delegate more. Which means that if people on the team meet or exceed expectations, you can start giving them more and more. The best of them will show you things that they weren’t able to do when they were working for someone else.”

Today’s Leadership Tip

“It might take 10 minutes [to coach someone] versus 30 seconds for you to tell that person what to do. But you’d rob that person of the opportunity to take something complex and make it into succinct, actionable items. That’s a skill that they can use over and over again. And it makes your job easier over the long term.”

—Clinical professor Brenda Ellington Booth inInsight, on the value of coaching your employees through complex situations.