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Investors Looking for
Profitable Business Opportunities
Investors Looking for Profitable Business Opportunities
There are generally three types of buyers who purchase a business:
- The hands on buyer.
- The absentee owner.
- The buyer who wants the latest “hot and profitable business.”
In addition, there are three types of businesses that we generally see:
- The business that has no real estate and has a significant amount of goodwill.
- Businesses with significant real estate assets (bowling alleys, hotels, car washes, assisted living facilities, etc.).
- Real estate assets such as industrial, retail, office or apartment building.
Typically, hands on buyers have interests in any of the three types of businesses that are listed above. They understand about having systems in place and having things run smoothly. This takes more energy and management time, but typically does better than when a buyer is an absentee owner.
Absentee owners contact me all of the time asking for businesses that they can run while being at home, on vacation or completely checked out. The pros of this system is that you don’t have to work as hard and you hire employees who can do the work and management for you. The cons are that you are leaving your investment in the hands of someone else. I have seen a number of companies been run into the ground because the owner does not manage the business on a day to day basis and does not have his pulse on the business. When owners take too many vacations or plays too much golf it typically has a bad effect on the business.
The third buyer is one who wants a “hot profitable business.” One of the problems with these buyers is that trends change all of the time. When a particular business is hot, then a number of people plow into the industry and there are then too many competitors. We typically find that the simplest businesses and the dirtiest businesses make the most money. Overall, companies with good financials with a long history and strong management will have continual profits.
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