• Chad Howard left corporate America after ten years to start a portable toilet business.
• It can be exhausting and the pay is worse — but Howard said he's never been happier.
• Howard's story comes as more young people flock to entrepreneurship amid a stagnating job market.

Being your own boss sounds great—until you realize the boss never clocks out.

Young people have been flocking to small business ownership, which has driven up demand for search funds, a targeted form of private equity where one or two entrepreneurs search for a small business to run. The trend is only expected to continue as tariff uncertainty casts a long cloud over industries ranging from private equity to consulting to technology.

To help understand the pros and cons of running a small business, Business Insider spoke to Chad Howard, an entrepreneur who quit his corporate job to start Halftime Rentals, a portable toilet rental business. He offered a realistic, and sometimes visceral, look at the transition and his new routine.

BI verified his story, including his past employment and revenue. The interview has been edited for length and clarity.

In the portable toilet business, at some point you're going to end up touching other people's shit.

Sometimes, the hose collecting sewage from a port-a-potty comes loose from a disposal truck. In the industry, we call that "getting baptized."

Our yard has a 20,000-gallon tank that holds sewage until we can send it to a wastewater treatment plant. That's usually the first thing I smell in the morning.

In moments like these, I wonder why I quit my corporate job to start a portable toilet company. But then, when I catch some fresh air and feel the sun on my skin, I realize how much happier I am.

The path to portable toilets

I had a successful corporate career in marketing at Procter & Gamble, but I've long had an entrepreneurial streak and ran a T-shirt printing business in college.

After I met my business partner, Austin Helms, he kept trying to get me to quit my job to buy or start a business. His background was similar to mine, but he had left corporate America with the help of a search fund accelerator program to run a plumbing, HVAC, and electrical company.

When Procter & Gamble asked me to move for the ninth time in my ten years there, I took Austin up on his offer.

I launched Halftime Rentals last year in Charlotte, North Carolina after six months of research and raising a million dollars from friends, family, and the blue-collar focused private equity firm 12 South Capital Partners. Just eight months into starting the business, I am already being approached by investors interested in buying the company, which has earned more than $1.2 million in revenue since launch.

The power of marketing

What really convinced me to join this industry was my experience shadowing three different portable toilet companies with Austin. We saw incredibly successful businesses, but no one hired dedicated salespeople or focused on marketing.

A light bulb went off. If these companies can succeed with almost no marketing, imagine what we could do.

We've hired a full-time salesperson and recently landed the Charlotte marathon as a client by quoting them a price for porta-potty rentals. They told us no competitor had ever reached out to them before. I use ChatGPT a lot to create lists of the top fifty largest outdoor events in Charlotte. I ask it to provide me with emails, and then I reach out to them.

A lot of our success comes from marketing. I go to conventions, like a local builders convention, and hand out shirts that say "Gettin' Shit Done." None of our competitors are there, and it's super memorable. At Procter & Gamble, I sold products to large chains and learned that you need to make those sales pitches memorable.

There's no out of office

On the weekends, all calls are routed directly to my cellphone. A few weekends ago, I got a call from an event an hour away whose toilet provider hadn't shown up. They asked for my help, so I threw two toilets in the back of my pickup truck and drove an hour both ways.

I don't plan anything on Saturday until 2:00 p.m. because there's a 70% chance that someone will call with an emergency.

It's hardest with travel.

I was visiting family out of state when one of his largest clients called to say that they had an emergency and needed 10 portable toilets delivered as soon as possible. If I were nearby, I would have just delivered the toilets myself, but I wasn't, and none of my usual workers were free.

I just don't travel as much as I used to.

Being the boss is great

My main goal in starting this entrepreneurial process was to enjoy my days, instead of feeling like I was wasting them reselling dish soap.

Now I'm reselling portable toilets, but the difference is that I am building something of my own. I'm able to be my own boss and do things the way I want them done.

I can also make a real impact on other people's lives. One of my drivers had a single DWI, and as a result, he couldn't get a driving job even though he has a commercial driver's license. I was able to give him a second chance.

In my old job, instead of focusing on our goals, we'd have forecast meetings, recap meetings, and email meetings. Now, I can focus on selling more of a great product. I'm not spending any of my time in meaningless meetings.

As your own boss, you can focus on building what you think you should be creating, not all of the other bullshit corporate America hands you.

There are no 'normal' days

I don't have time to focus on anything but work. I don't go out to nice dinners, travel, or hang out with my friends at happy hour. It's made it easier to live on my current salary, which is lower than my corporate salary, because I don't spend as much.

I can't sleep in until 8:00 am on the weekends anymore, or easily fit in a workout. It's more exciting, but it's much harder to have a "normal" day.

I can't even focus on food or exercise. I had a wake-up call after I put on 15 pounds in my first three and a half months.

When I was in Asheville, North Carolina, living in an RV for a month, there were times the gas station was my only option for a full meal. There was one day I ate Chic-fil-a for breakfast, lunch, and dinner. I was like, what am I doing?

Now, I'm more mindful about what I eat, packing healthier options for long days. And I try to fit in a workout where I can.

You reap what you sow

Outcomes are tied directly to my effort. I'm responsible for the business's success, which correlates to how hard I work.

Success in corporate America is more complicated. Promotions take into account how much someone likes you, or the macroeconomic environment, or the success of whatever product comes out.

Now, I have some control over my destiny, which is both good and bad.

One telling example was how I responded after the terrible hurricane in Asheville. Home Depot called asking for portable toilets, so we loaded up the toilets and drove the two hours to Asheville.

All of our toilets had our phone number, and the next day, I had 222 voicemails while still fielding calls.

I decided to set up shop for a month in Asheville, living out of an RV and ordering 500 more toilets to meet the demand. By choosing to put in the hard work, I set my business up for success.

Big decisions ahead

I've already received offers from people who want to buy the business, but I'm conflicted about it. I'm someone who lives in the moment.

People like to ask me what my goal is for the company. Transparently, I didn't really have an end goal in mind. I wanted to start this company and build it into the biggest portable toilet company in Charlotte, enjoy my days, and have a positive impact.

If I sold to a roll-up business, they'd still want me to run it. I'd have equity in their larger business, but I would be right back to working for someone else.

For now, I'm going to wait and see. One investor said that their main strategy would be centralizing the back office, which would mean letting go of our office manager. She's incredible, and it would pain me to the core if she lost her job because of my decision.

• Search funds are having a moment, but that doesn't mean they're right for everyone.
• Half of all search funds fail, so it's important to be sober and clear-minded when jumping in.
• We list the dos and don'ts of success in the world of entrepreneurship through acquisition.

Judd Lorson became interested in search funds as a pathway to entrepreneurship while at the Yale School of Management and launched a fund shortly after he got his MBA.

Even with the help of Search Fund Accelerator, which provided capital and mentorship, the road to buying a company turned out to be "messy and chaotic," Lorson said. In a research paper about his experience, coauthored by Yale School of Management senior lecturer A.J. Wasserstein, the former Navy officer described how he and his wife would search Zillow for homes when he was close to a deal, only to see their dreams evaporate when the acquisition fell apart and they had to start over again.

Even after buying a business, the challenges continued, with Lorson once having to forgo pay for two weeks while waiting for a short-term loan from his investors to pay expenses.

Search funds, sometimes referred to as "mini private equity," are having a moment. A 2024 Stanford Business School study found that the creation of such funds, which raise money to buy an existing small business, hit an all-time high in 2023 (the latest year studied) with more than 90 first-time search funds raised. Stanford found that the strategy is particularly popular among young people with nearly 80% of first-time fundraisers in 2023 clocking in at 35 or younger, including many freshly graduated MBAs.

For every story of someone becoming their own boss and making millions, however, there's a story of a failed business or someone who never even buys one. Lorson wrote that he hoped his own challenges would help others see the "realities of this career path" before making the plunge.

In an effort to help aspiring searchers, Business Insider spoke to search fund researchers and entrepreneurs about what they should know to make a clear and sober decision about their future.

"Many entrepreneurs fantasize about a $10 million payday," said Wasserstein. And while this can happen, it's rare. Wasserstein's examination of the 2022 Stanford Search Fund Study found that only 16% of search fund entrepreneurs delivered a $10 million-plus payday, with an average payday for those who managed to sell their business at $5.7 million.

"It is rare and not easy in any way," Wasserstein said of the big payday. "Understand what needs to happen for that to be a reality."

Don't plan a vacation anytime soon

Being the boss means you're never really off the clock. This can create challenges in your personal life and prevent you from taking a vacation — or even a weekend off.

Chad Howard, who left his corporate job to start a portable toilet rental business last year, has dealt with this firsthand. Howard was visiting family out of state when one of his largest clients called to say that they had an emergency and needed 10 portable toilets delivered as soon as possible to a location that had just run out of water. He would have just delivered the toilets himself, but he wasn't nearby, and none of his usual workers were free.

"I just don't travel as much as I used to because that feeling when you have to coordinate everything by phone feels terrible," he told BI of the experience.

Howard said the pressure to be available is magnified by the desire to make a good impression as a new business owner.

"Work-life balance exists in corporate America because most things aren't an actual emergency," he said. "Someone might say that, but in reality, if something comes in at off hours, it can wait until the next day, and nothing bad will happen."

Howard said you have to be able to solve problems when you're in charge. Gone are the days when he could sleep in until 8:00 a.m. on the weekends or easily plan out when he could fit in a workout. It's more exciting, but it's much harder to have a "normal" day.

Don't expect to walk away when you sell

According to the Search Fund Primer, the typical search fund timeline involves two years of searching for a business, followed by five to six years of operations before exiting a company, usually through a sale. A study conducted by Wasserstein, however, suggests that an "exit" doesn't necessarily mean the commitment to the business is over.

Wasserstein found that more than three-quarters of sales were to private equity firms or companies backed by private equity. And the majority of entrepreneurs making these deals maintained stakes in their businesses.

"Our data says that 65% of exiting searchers roll 25% to 49% of their equity," Wasserstein said. "Additionally, they need to stay with the acquirer for approximately two years."

They often have to stick around as CEO under a private-equity boss, which can present a whole new set of challenges. Instead of answering only to their investors, searchers may also be beholden to their new owners. Wasserstein's study found that these new owners have a net promoter score of negative 33, which suggests that search funders who've sold are more likely to be unhappy with their new partners than not.

The pay is better, however, with the majority of those who stick around for more than five years with their new equity partners making more than 30% more than they did when they were running the business themselves.

Be prepared to give up

Half of search funds fail. According to the 2024 Stanford search fund study, 37% never find a business, while 19.5% fail to make a return on investment. Another 5% have actually lost all of their equity. Failure is part of the game in entrepreneurship, and the earlier you can deal with it, the better your career.

The inability to accept failure can be costly as it can lead searchers to stick by businesses that aren't working.

"Our data says that entrepreneurship through acquisition CEOs and investors hang on to floundering businesses for too long," Wasserstein said, adding that "bad companies tend not to recover."

His research categorizes search fund failures into three categories: no-dealers, imploders, and drifters.

No-dealers never find a company, which can be emotionally challenging but doesn't carry nearly as much risk of long-term negative impacts. Imploders fail soon after acquisition, which can be traumatic, but means that the searcher hasn't put too much of their career into it.

Drifters hold on because they're determined to improve their companies, but, as Wasserstein writes, "time is a vicious enemy."

"If a drifter runs a business for five to ten years in perpetual anticipation of breaking out the next year, time becomes fleeting," he wrote, adding, "If a searcher is a decade into a project at 45 years old with no equity to show for their efforts, they understandably feel frustrated and disappointed."

The longer an entrepreneur spends with a failing business, the worse the impact on their lifetime earnings and professional opportunities.

It can even lead to "emotional and physical wear," he said, and can have a major negative impact on their relationships.

"As the CEO relentlessly fights to improve the company, they often neglect their health, friends, and family," Wasserstein wrote. " More often than not, the CEO's spouse, closest friends, and family realize perseverance is futile before the CEO admits this to themself."

Find a peer group or mentor

There are many guidebooks, most notably the Stanford Search Fund Primer and the Harvard Business Review's Guide to Buying a Small Business, to help searchers navigate the process, and a range of online influencers and communities. But it's also important to find people you can call in a jam.

Finding and running a business is "far more demanding than it appears on paper," said Newton Campos, professor of entrepreneurship at IE University in Madrid and the founding partner of Newton Equity Partners, a recently launched fund that invests in search funds. You must be a capable fundraiser, negotiator, sales agent, and business operator. And because investors are often buying someone's "life's work" or "a piece of family history," it requires emotional intelligence alongside modeling skills.

If you're in graduate school, find a professor or alumnus you can lean on. People coming from the business world might want to find investors who have the time and ability to act as a guide or mentor, or work with an accelerator like Lorson did.

Finding support can also help emotionally. Searchers often move to new cities to start their businesses, which can leave them socially isolated and much too busy to make friends. Also, being the boss can be lonely, as Josh Leslie, a CEO, told BI back in 2019.

"I don't get to go to lunch and complain about the boss with my coworkers," he said. "My role in the company is unique and uniquely isolating."

• Young people are flocking to search funds, which seek to buy and grow small businesses.
• The model is popular with MBAs and young professionals looking to test their entrepreneurial mettle.
• The trend comes amid growing job insecurity for white-collar workers.

Just two weeks ago, Adam Froendt was a vice president of private equity and junior capital at Churchill Asset Management, a private capital affiliate of insurance giant TIAA's asset manager Nuveen.

Not yet 30, he had been promoted three times in his eight years in the industry, closing more than 60 middle-market private equity deals and 30 fund investments.

Last month, he quit that promising job to run a business. Now, he just needs to find one to run.

Froendt is one of a growing number of young people looking to test their entrepreneurial mettle through the world of so-called search funds. Sometimes described as mini-private equity or entrepreneurship through acquisition, a search fund is a small investment fund run by one or two people established to buy an existing small business. Once the business is purchased, the "searchers" run it with an eye toward creating value by streamlining operations and growing in size.

A 2024 Stanford Business School study found that search fund creation hit an all-time high in 2023, the latest year with data, with more than 90 first-time search funds raised. The strategy is particularly hot among young people, with Stanford finding that nearly 80% of first-time fundraisers in 2023 clocked in at 35 or younger, including many freshly graduated MBAs.

Some searchers, like Froendt, are so eager to be their own boss that they forgo outside investments — using their personal savings or their spouse's income to fund their entrepreneurial ambitions.

The boom in search funds is partly a response to a more complicated job market. White-collar jobs, once the obvious pathway to success, feel less stable. The dream of entrepreneurship is still alive and well, but tech startups can feel out of reach given the enormous shadow tech giants like Google and Amazon now cast over the economy.

Search funds and their various cousins offer a more realistic path to entrepreneurship.

"It's an alternative to the romantic entrepreneurial belief that you can only succeed by starting a company," Newton Campos, professor of entrepreneurship at IE University in Madrid and the founding partner of Newton Equity Partners, a recently launched fund that invests in search funds, told BI.

Froendt, who was bitten by the entrepreneurial bug running a car wash in high school, calls it "betting on himself."

"Traditionally entrepreneurship is thought of as "zero-to-one," involving brand new ideas starting at the ground floor," Froendt said. "When my eyes opened to the thought of being an entrepreneur in the context of an existing business, it immediately resonated with me."

Here's why some of the brightest young people are choosing to buy and operate unglamorous businesses like porta-potty rentals (yes, really) instead of climbing the corporate ladder.

How search funds work

The original search fund model, created in the 1980s, begins with an entrepreneur finding investors to fund their salary and expenses during a multi-year search for a business worth buying.

Froendt is taking a higher-risk and higher-reward path by self-funding his search, which takes, on average, two years. This model offers more flexibility over the businesses targeted, as well as more control and, eventually, more equity. As the founder of TrueGrit Capital, Froendt will be living off his "own personal balance sheet" (his savings) for up to two years.

The next step is to buy a successful small business, often from an owner-operator looking to retire. Froendt is looking for a company with between $3 million and $12 million in yearly revenue located between Maryland and South Carolina and in the healthcare services (think home health or care management), financial services (think insurance or accounting), or knowledge (think training or certification) industries.

The searchers' goals are to streamline operations, grow revenue, and create value for themselves and their shareholders. Most searchers plan to exit after five or more years, though some plan to hold indefinitely, which is what Froendt hopes to do.

The payout can be massive. According to the Stanford study, the average return on investment across the search funds studied was four and a half times invested capital, much higher than that of a traditional private equity firm.

There are many similarities to private equity, causing some to call the model "mini private equity." But Peter Kelly, a lecturer at Stanford Graduate School of Business who conducts the biannual survey and who ran a successful search fund business in home health care, said the terminology is inaccurate.

Kelly, who prefers the phrase entrepreneurship through acquisition, said that the model borrows from private equity financing but is fueled by the entrepreneur's desire to become an owner-manager.

The manager of a private equity fund gets paid through fees, incentivizing them to grow their assets under management, he said. A searcher is a direct investor (usually the largest) and gets paid by growing the business.

A.J. Wasserstein, a senior lecturer at the Yale School of Business put it this way: "Search is about jumping into a CEO role and leading and building. Private equity is about providing capital."

Why it's growing

Search funds were developed in the MBA world, and some of its popularity can be traced to an ever-growing list of courses about the model.

Campos counts 25 schools that teach it worldwide but said he expects the number to reach 100 in just a few years.

As interest in search funds grows, more firms, including Pacific Lake Partners and Relay Investments, have raised funds to invest in them. Campos founded his own investment fund earlier this year to help institutional investors find search funds in Europe and beyond.

Campos, who said he sold a rental apartment to invest, has made 18 personal investments in search funds, which have netted him a nice return.

Websites like SearchFunder, which connects investors with prospective searchers, and a series of how-to guides have made "searching" easier than ever.

"A Primer on Search Funds," updated every few years by Kelly and his Stanford colleagues, offers a very granular guide to the process, including sample legal documents to help close a deal. Campos called the document the "Bible" for the business model.

Harvard professors and entrepreneurs Rocye Yudkoff and Richard Ruback have published the "HBR Guide to Buying a Small Business," another essential read for anyone interested in the industry.

They've even turned it into a podcast, recently discussing how buying a successful small business can be less risky than betting on a career with a large corporation.

"That institution might be around forever, but that doesn't mean you're going to be around forever inside that institution," Yudkoff said.

Interest in search funds is only expected to continue as tech and consulting firms cut jobs and Wall Street hiring slows amid fears of an economic downturn.

Some 15% of the Harvard Business School's 2024 class that were looking for jobs did not receive any job offers after graduation, compared to only 4% in 2021.

Search funds have even become the target of online jokers. They are a recurring theme of Search Fund Stu, a financial meme maker on Instagram whose page is full of jokes about unsexy businesses like port-a-potty rentals and social media influencers promoting the model.

Search Fund Stu told BI that he is operating a business that he bought through a search fund, and asked to remain anonymous so he can post freely. One of his posts shows a photo of an uncomfortable-looking dog, labeled "MBA without a full-time offer" and riding a mini-horse labeled "a $500k search fund."

Alongside the jokers, there are lively discussions on "SMB Twitter/X," where current operators commiserate and gloat about the highs and lows of the model, spawning some bonafide influencer stars, like Codie Sanchez, with more than half a million X followers and 2 million Instagram followers.

Sanchez left a career as a private equity investor to buy and sell small businesses and teach the model to others through her media brand, Contrarian Thinking.

Froendt recently quit social media but said that Walker Deibel, another influencer and author of the guide "Buy Then Build," played a big part in his decision to try out the model.

Kelly warns, however, that people shouldn't jump into search funds because they see it online. They are still quite risky compared to climbing the corporate hierarchy, with 37% of funds raised failing to acquire a company and 31% of companies acquired either still operating or having exited at a loss, according to the Stanford survey.

"We try not to promote it in the classroom, and I don't care if my students do it, I just want them to learn about it," Kelly said.

"If no Stanford business school graduates did it one year, I might say, 'That's too bad,'" he said, adding: "If 30 graduates did it, that would make me nervous."