Want to AI-Proof Your Career? Buy a Boomer’s Blue-Collar Business.

Forget flashy tech startups. Increasingly, MBA students are betting on “boring” businesses — HVAC, plumbing and electrical companies, landscaping firms, and precision manufacturers — that keep the economy running.

“MBAs are recognizing that many blue-collar businesses have compelling fundamentals, in addition to being far less vulnerable to AI disruption,” says Les Alexander, the John Glynn Endowed Professor and Professor of Practice at the University of Virginia Darden School of Business. “They also see significant growth opportunities. These businesses are relatively straightforward to understand and operate, and owners can grow them by expanding into new geographic markets, adding services or using more sophisticated marketing to win market share from competitors.”

At the same time, millions of Baby Boomer business owners are nearing retirement, creating an unprecedented wave of small and medium-sized businesses (SMBs) coming to market.

According to the McKinsey Institute for Economic Mobility's 2026 report, roughly six million SMBs are expected to undergo ownership transitions by 2035. Of those, more than one million firms, representing up to $5 trillion in enterprise value, are considered viable candidates for sale.

In this Q&A, Alexander explores what this moment means for business school students and alumni who want to lead a company without building one from the ground up. He also shares advice for prospective SMB buyers and explains the financing options available to those pursuing Entrepreneurship Through Acquisition (ETA).

Below is an edited transcript of the conversation.

Q: Business students with entrepreneurial ambitions have long been told that the biggest opportunities are in tech and high-growth startups. What's driving so many MBAs to acquire “boring” service businesses like HVAC?

Tech is inherently risky, whether you’re launching a new venture or acquiring an existing one, because the market evolves so quickly. By contrast, many blue-collar businesses have been around for decades and are deeply rooted in their communities, which makes them more resilient to the forces that often disrupt the tech sector. If you're looking for a good, solid, basic business that doesn't have that risk, these blue-collar businesses like plumbing, HVAC and others are very attractive.

What buyers give up, to some extent, is the steep growth trajectory that tech businesses can offer. Tech startups can scale quickly and often without significant capital investment. In blue-collar businesses such as plumbing or HVAC, growth is typically more incremental: adding new crews, expanding service capacity, and investing in trucks, tools, or other equipment to support that expansion.

Q: If a Darden student is interesting in exploring ETA, where should they start?

I’d say, take my Entrepreneurship Through Acquisition class. Take the ETA Operations class in Q2. Take the ETA Velocity class I teach in Q3 and Q4. And get involved in the ETA Club so you can connect with other students interested in the space, learn from their experiences, exchange ideas and hear from the speakers the club brings in.

I’d also recommend attending some of the conferences. Darden, in partnership with Duke, UNC, and Georgetown host the SEETA Conference in the fall, and schools like HBS, Kellogg and Booth also offer strong ETA conferences. They’re a great way to hear directly from people in this space.

If you’re serious about pursuing ETA, you need to practice evaluating deals so you can analyze them efficiently. The more businesses you review, the better you'll become at recognizing what makes an attractive acquisition and what should raise red flags.

Start by requesting deal materials from business brokers and reviewing the Confidential Information Memorandum (CIM) for each opportunity. As you study more CIMs, you'll develop a sharper understanding of the financials, operations, and growth potential that distinguish a promising business as well as identifying the risks of a potential acquisition.

Q: Let’s talk about selecting the right business to buy.

Look for predictable, recurring revenue. It’s a sign that the business is operating effectively, and it reduces the risk of disruption when you step into a leadership role. Because the company relies on contractual or recurring revenue streams, it is better positioned to sustain income and profitability through the transition.

I’d also recommend looking for a business with several years of operating history. It’s much harder to evaluate a company that has only been around for a couple of years because there isn’t enough track record to assess its performance over time.

You need to find a business that's profitable, because we don't buy businesses in ETA to fix them. We buy those businesses to continue the legacy of growth. So we want to find a business that's been profitable for many years, has good margins and has good growth from both a top line and a profitability standpoint.

I also tell students to understand the seller’s motivation. The owner often knows the business and the industry better than you do, so you need to understand why they’re selling. They may be selling because they see problems ahead. But if it’s an owner who has successfully run the business for years and is ready to retire, that’s often a different situation. They are ready to pass the torch to someone else.

Q:  What are some of the red flags that buyers should watch out for?

Pay close attention to volatility in the business’s financial performance from year to year. And be careful not to overpay. If a seller insists on a very high price and you become emotionally attached to the deal, you may end up paying more than the business is worth—and that can create problems for you later.

It can be dangerous to buy a business that is very reliant on the seller's involvement, because when the seller leaves, you’ll have to fill those shoes, and that can sometimes be difficult to do.

I also tell my students to be careful with businesses that rely heavily on one-time or project-based revenue. You need to understand the risk that comes with having to continually replace that revenue because customers aren’t coming back on a regular basis. It can become a constant cycle of finding new customers and filling that pipeline.

Another important thing to consider is customer concentration. Some small businesses rely heavily on just a few customers for a large share of their revenue. That level of dependence can create real vulnerability if one of those customers leaves or reduces their business. You lose a large amount of revenue, and that can have a negative impact on your business.

Q: What are the financing options available to those pursuing ETA?

Those small businesses are often the right size for MBA buyers. They tend to have less than $5 million in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). But most buyers still have to find sources of capital.

If you’re a self-funded searcher, the Small Business Administration (SBA) debt can be an effective way to finance a deal. Even though SBA loans are usually capped at around $5 million, they can often cover 80% or more of the purchase price, so you only need to bring a relatively small amount of equity to the table.

Sometimes you can also get the seller to carry a note for part of the purchase price. So if you can structure the deal with 80% SBA financing, 10% as a seller note, and 10% in equity capital—from you, friends and family, or people in the ETA community who are willing to back you—that can be a really effective way to get the deal done.

If you go the accelerator route, you already have a built-in source of capital. The accelerator provides the equity and typically helps you line up the debt financing as well, so it takes some of that fundraising burden off your plate. That said, you still have to convince the accelerator that the business is worth buying and that it’s an opportunity they should back.

And if you go the search fund route, it’s similar. Your investors have already funded the search, but you still need to convince them that the deal is worth putting more capital into. So even though you already have a group of people who believe in you and are interested in backing you, you still have to sell them on the specific deal you’re raising money for.

Q:  Is there anything else MBA students considering buying a business should know?

The big message is that this isn't just about the deal. The real challenge — and opportunity — is leading the business after the acquisition. Your success depends on how well you run and grow the company once you own it.

When you own a blue-collar business like HVAC or electrical, there will be times when you have to roll up your sleeves and jump in. If members of the crew call in sick, there may be no one else to delegate the work to. For MBA graduates whose experience has been largely in white-collar settings, those hands-on operational challenges can be unfamiliar, but they're part of the reality of owning and leading a small business.

They also need to be comfortable managing people because these businesses are highly dependent on their employees. Leading a team comes with challenges, and if people management isn't something you enjoy, this may not be the right path for you.

Owning a small business can be rewarding and fun because every day brings new challenges and it keeps you on your toes. At the same time, being the leader of a small business can be lonely, and there may be few people you can turn to for advice. That’s why I encourage my students to build a network of mentors and advisors who can support them throughout the search process and continue to guide them after they acquire a business.