The speaker outlines a six‑step model called “entrepreneurship through apprenticeship,” illustrated with a real‑world case where a recent college graduate became CEO and majority owner of a $50‑$60 million annual contracting firm without using his own capital. The process begins by selecting a hard‑to‑transfer industry (e.g., general contracting, consulting, digital agencies) where owners often lack succession plans. The aspiring entrepreneur then identifies a retiring owner, works for several years to master operations and build trust, and positions himself as the owner’s informal successor. A profit‑carve‑out agreement is negotiated, allowing the apprentice to purchase the owner’s equity incrementally from the business’s cash flow. Over 4‑5 years the apprentice acquires 100 % ownership, becoming a full‑time entrepreneur. The speaker highlights the model’s advantages—low capital risk, paid learning, transferable skills, and a win‑win for the retiring owner—and its drawbacks—slow timeline, uncertainty, and reliance on luck and relationship quality. The talk concludes by urging aspiring entrepreneurs to consider this less‑explored, relationship‑focused path instead of traditional high‑leverage buyouts.
Chapters
All right, let's talk about something that I've seen that's total genius. A friend of mine over the past decade went from basically just leaving college to somebody that is now the CEO and majority owner of a $60 million a year business. And he did it all without having any money out of his pocket. And the way this worked is a process that's a bit different than the ones that a lot of other people use, but it's called entrepreneurship through apprenticeship. So I'm gonna tell you how it works. So really this process involves really 6 steps. So step 1 is you go find an industry, and that could be something like contracting or consulting, any kind of business that often has trouble selling. And the reason these businesses will have trouble selling is because the value of the business, uh, is tough to transfer, right? So for example, in the case of general contracting, you have a business there that is tough to sell because it's tough to predict what future revenues look like, right? You're doing general contracting, which means it's project work. So like, how do you predict that that's gonna continue year after year? Uh, or maybe it's a business that's totally centered around relationships, right? So like a lot of digital agencies or digital services businesses or consulting businesses, they totally are dependent upon the relationships that the owner has. So first thing you do is you go find an industry like that that appeals to you, right? As a, as a future entrepreneur. And you say, okay, well, like, this is the one for me with the plan of doing entrepreneurship through this apprenticeship model, right? And what you wanna avoid are businesses that are ones that are usually sold pretty easily. So like software businesses, franchises, different types of engineering firms, those sort of things. Like, they often sell pretty easily, but there's this other category they don't sell so easily, and that tends to create a type of person that owns these businesses just like struggling to find somebody to take over the business for them. They don't have a succession plan. Their kids don't want to work in the business. They're not interested in being a general contractor or doing any of the kind of get-your-hands-dirty type things that this business requires, even though it's been very lucrative. The kids want to go do something else, and there's nobody inside that wants to take the thing over. So that's where you go to step 2, which is after you've identified this industry that's really exciting for you, you go find someone who is potentially reaching retirement age and does not have a succession plan. And that's precisely what my buddy did. So he graduated from college and he decided to get into the construction business, and he started to go in and learn a bunch of different stuff around project management and how to manage those projects, do estimation, and all the things that happen in general contracting. And he lucked out in that he went to go work for a guy who had been owning that business for over 30 years, and the guy was ready to retire. Like, he had sports cars and he had a boat that he liked to go fish on, and he didn't have a succession plan. Nobody was ready to take over that business from him. And so what my buddy did was, well, he went to go work for that guy, and he didn't come in saying, oh, I want to be your succession plan, I want to take over from you, and I want to own your business someday. But he came in, and for the first 3 years, he was just like a great employee. But he had been very strategic about finding, A, a market that he wanted to be in, and then B, finding somebody who could probably use him as a next of kin, right, to take over that business at some point and sell it to him. So now my buddy has gone to do step 3, which is to go work in this business and work for this person that, you know, potentially doesn't have a succession plan for their business. And he went in and he just worked for them for a couple years. He was project management, learned all the different stuff that he was supposed to, and started to become an expert in how the business was run. And it was beautiful because he did 2 things in the middle of that process. Number 1, he really understood the construction business and what it was gonna take to run a business like that someday, whether it was taking over the existing business and buying it from the owner or going off and starting his own in the future. And then the second thing he did by doing great work during that period of time was develop a level of trust and affinity with the guy who owned the business, who was potentially gonna retire in the future. And so by doing those two things, he set himself up, I think, in a perfect place, uh, by year 4 or 5, to go on to step number 4, which is he became the succession plan for the owner of the contracting company. They sat down and my buddy said, hey, I would like to own your business someday. I would like to own this business and be your succession plan. And by then he had been such a good employee and such a good teammate for this owner that he was almost like, well, kind of a son to the guy. And that created a win-win for the two of them. They were able to have a discussion where the owner who wanted to get out of the business, he could get bought out over time and he could start to step away and go spend more time on his boat and have fun and all that kind of stuff. And my buddy would get to start to buy into the business year after year. And so that's what they did. They, they sat down and they put together a plan where a percentage of the profits would get carved out. And let's just use, for sake of example, 20% for the first couple years would get carved out. And then what would happen is, is the entirety of that money would be taken and go straight back to buy out the shares of the original owner. And over time, after they agreed to the price and all that kind of stuff over a number of years, like eventually my buddy would own the business. And eventually this continued on into step 5 where he eventually bought them out completely. The existing owner sold the business to him over a number of years and he used his share of the earnings of the business as a partner in there running the business, uh, to buy out the original owner to a point eventually after 4 or 5 years where he owned 100% of of the business and bought them out, and everybody ended up winning. Uh, he was somebody who now owned the business, and the guy who wanted to get out, he had his nest egg of retirement and he could go have good times, and everybody won. And so that finished out step number 5. And so what you see here is this whole process took a number of years, right? That is one of the things to know about entrepreneurship through apprenticeship is like, it doesn't happen quickly, right? It's not like using in here in the US, you go use an SBA loan to go buy a business and own it directly all on day one. It takes time. And that ended up where he is today, like in step 6 of this entrepreneurship through apprenticeship standpoint, which is he's a full-on entrepreneur. Like, my buddy owns this business. It's a big business, right? They're doing $60, $50, $60 million a year in contracting. Like, that is something where he became an entrepreneur and he did it in a way that was, well, The downside's not super awesome, right? Like we talked about how this took time. You know, it took him a number of years and you can imagine it takes 5, 10 years to go through this whole process that I just laid out. And so it's to some extent kind of slow. It doesn't happen as quickly as other things. It's also not certain, right? My buddy got lucky that he ended up signing up with a guy who wanted to retire, who he got along well with, who didn't bait and switch him on any of this stuff. So, you know, that's the thing where he got lucky. But also you have to understand entrepreneurship through apprenticeship. Well, it's not certain. You don't know for sure thing because, well, you have to go in and try to make it happen over a number of years. And look, here's the last thing. The reason this entrepreneurship through apprenticeship business works is because these businesses like general contracting or digital agencies or other things along those lines, they're businesses that typically don't transfer easily. When you buy a business like that, well, you're kind of left with a business that potentially doesn't transfer easily when you want to get out. You have to go through the same process to get out of the business at some point when you want to retire. But look, the upside is like entrepreneurship where you can get in with like low capital risk like my buddy did. Like it's kind of a fantastic thing, right? He went in, he got paid to learn the industry, he got paid to be an apprentice. He didn't have to risk a bunch of his own capital to get into the business. He didn't personally guarantee a bunch of loans. It was a low capital risk kind of thing. And he learned things along the way. And even if it had not worked out with the gentleman who was selling him the business and retiring, he developed transferable skills. Like, he now knows project management and can go get high-paying job in construction all he potentially wants. So he learned something along the way. And then the last thing I think in terms of upside for this model is it's beautiful when you can develop a relationship with somebody and you can help them go live their best life, right, and retire, uh, and potentially be the son or daughter or heir that they didn't have to take over the business. And, you know, there's just something beautiful about helping your fellow person that way and seeing them really love their life being, well, out on their boat or, you know, fill out the last section of their existence on this planet. So anyway, it's great that it can be fun and helpful. This is a path, this entrepreneurship through apprenticeship path that a lot of people just don't consider. And there's so many people that are pushing young entrepreneurs to go buy businesses and do big loans and all that kind of stuff. But look, there's another path that's potentially less risky and can be a lot more rewarding, and you just sign up for it. It's called entrepreneurship through apprenticeship. Hope you liked it. Tell me what you think. Reply below.
