Buying a Business vs. Investing: Should You Buy a Business in 2026?

“There is only one thing that makes a dream impossible to achieve: The fear of failure.”

– Paulo Coelho

Should You Buy a Business or Invest in the Market?

If you’ve ever asked the question, “Should I buy a business or simply invest in the market?” this guide will help clarify the trade-offs.

When evaluating the leap into starting or buying a business, some benefits are easy to measure — like income or return on investment.

Others are harder to quantify. Things like:

Flexibility
Real-world education
Perspective
Business acumen
Sense of purpose
Experience
Increased confidence

These are generally results of business ownership, but are difficult to ascribe a value to—especially a future value of what those qualities will mean for future wealth accumulation.

So let’s stick with what can be measured for now.

Should you buy a business? Let’s dive into the details.

Is Buying a Business a Good Investment?

Imagine Madeleine is planning to purchase a small business for $50,000.

More specifically, she’s considering a dropshipping website priced at 30x its monthly profit — meaning it earns about $1,667 per month before taxes.

The tax will depend on her personal income tax rate, but let’s assume it’s 25% in this example.

This leaves $1,250 as potential income to herself every month ($15,000 per year).

Alternatively, she could invest this $50,000 in a diversified stock portfolio, and earn an estimated 7-9% annually over many years.

We’ll assume 8% market ROI for this example.

In both cases, we’ll assume that any profits are reinvested in the stock market — either from the original portfolio or from business cash flow — to keep the comparison fair.

Now we can run two simplified projections of each option. Here’s a simplified buying a business vs investing comparison.

Buying a Business vs. Investing: A Simple ROI Comparison

Year	Stock Market	Business Purchase
1	$50,000	$0
2	$54,000	$15,000
3	$58,320	$31,200
4	$62,986	$48,696
5	$68,024	$67,592
6	$73,466	$87,999
7	$79,344	$110,039
8	$85,691	$133,842
9	$92,547	$159,549
10	$99,950	$187,313

So is buying a business worth it? The simply math, assuming absolutely nothing changes for ten years, shows a breakeven point around the fifth year.

By year ten, the business owner could be almost double ahead of the market investor, with $187,000 vs. $100,000.

Simple math says to buy the business if Madeleine is willing to put in the effort to keep it up and running.

Many people ask, should I buy a business now or wait until market conditions change? The real answer depends on understanding the risks behind the numbers.

Risks of Buying a Small Business

Of course, reality is more complicated than the chart above. No business is a fixed-income investment.

Her business could suffer from a sudden algorithm change, reduced demand from AI-generated answers, disruptive new products, or aggressive pricing by competitors. She might struggle to deliver the same quality service as the previous owners — or she might simply burn out.

In the worst case, her $50,000 investment could go to zero. She has to be mentally prepared for that, even if the likelihood is small.

Alternatively, she might be able to grow the business and double those monthly profits. Or she might be able to merge this business with another that complements it, and thereby reduce overall costs (and increase profits).

The decision to start or buy a small business comes down to far more than the projected breakeven point, or the potential to double or triple your return on investment over the years.

What You Should Consider Before Buying a Business

If you’re going to take the leap, there has to be a bigger reason.

When you add up all the intangible benefits of entrepreneurship, one common denominator emerges: personal growth.

Warren Buffet has repeatedly stated that, by far, “the best investment you can make is in yourself.” One way to fast track that investment in yourself is to cast yourself out into the wild world of business ownership. Not blindly, mind you. But with a carefully crafted strategy and a mentor or coach to help you along the way.

Some businesses will succeed. Some will fail. Some will coast.

If you’re considering this leap yourself, don’t just weigh dollars. Weigh the person you’ll become in the process.

In the long run, it’s not just your net worth that grows — it’s your capacity to act boldly, take charge, create, lead, and thrive.

For readers exploring the option in detail, the U.S. Small Business Administration (SBA) provides an excellent checklist for evaluating an existing business before you buy.

Is Entrepreneurship Right for You?

So should you buy a business? The answer depends on your personal answer to these questions.

Points for Reflection:

If you could design your ideal workday, would it look more like an active owner, a passive investor, or something else entirely? Why?
Are you willing to risk loss, and face the unknown, for the chance at taking more control — and securing greater freedom?
Where do you see the greatest return: in building something of your own, or investing in what others are building?