Flipping Businesses Instead of Houses
Fixing or flipping a small business is much easier than
flipping houses for a variety of reasons, and in this brief article I am going to outline and touch on a few of them.
Below is a list of 5 advantages in dealing with businesses instead of houses:
- Very little competition: You are not competing with every Tom, Dick and Harry that owns a hammer and a paint brush that stays up late at night watching HGTV shows, buys a “Get Rich Quick” Real Estate course on the internet, or attends a seminar at a hotel somewhere and plunks down a bunch of money for a course and “how to” coaching.
- Seller Financing: Statistically, 84% of owners will carry back some or all of the financing, so locating money for the deal is right there at your fingertips.
- Immediate Cash Flow: If you pick the right deal you get cash flow the very next day.
- Fast Turn Around: Most businesses that are currently operating at a loss can be made profitable within in 60 to 90 days
- You Control The Outcome: In a business, you control about 85% of what happens. Your results are not dictated by government housing regulations or bank loan rates.
A business is totally under Your control. You pull the strings and You control it.
You also get cash flow, tax write-offs, incentives, and a whole host of other immediate benefits.
You can’t say that about real estate market. Not in Land, Not in Houses, and not in Commercial Properties either.
No other investment in the world gives you so much power and control over the outcome.
In the business of business flipping you are the master of your destiny.
The opportunities are everywhere. The biggest problem when it comes to investing in businesses is this:
How-To Information is hard to come by. It is a closely guarded secret because those doing it are making so much money, they don’t want to train the competition.
How To Information about real estate investing is easy to come by because many of the people selling information don’t have a clue how to make money in the real estate business and need to sell how to information to pay the bills.
Every year, according to the U.S. Census Bureau:
There are approximately 2,000,000 businesses in America
Every year, 470,000 of them close their doors for one reason or another.
About 60% of the businesses out there are not worth looking at, but the remaining 40% equals an enormous amount of businesses available for purchase with little or no competition!
Imagine how it would feel playing a sport and you are the only one on the field. The ball comes into play and you are the only one on the field to pick it up! That is how it is for those of us dealing in businesses.
According to several studies, roughly 1/3 of all US companies are owned by people over 55 years old, and 76% of them are expected to sell and retire, or close within the next 10 – 15 years.
When you get right down to is, the numbers are staggering and opportunities are abundant!
In a recent study performed by BizBuySell, the largest business buying and selling website in the world:
- 97% of business owners 65 and over plan on selling within the next 5 years.
When asked for an expected timeline,
- 57% of them plan on selling within 6 months
- 81% of them plan on selling within the next 12 months.
That means an enormous amount of businesses are about to come on the market.
One of the most common mistakes a business owner does when they begin thinking of getting out is they lose interest in the business and management begins to slip. When this happens revenue begins to decrease, and the business begins in a downward spiral.
This creates an enormous opportunity for people like you and me because, when a company is established, has a customer base and is managed poorly, it can be turned around rapidly with minimal work.
Business opportunities like this are all over the place. Owners working in their business who lose interest and clueless to what they are doing wrong, or could care less and just want out.
All you need to do is step in there, make a few changes, increase revenue and profits, put a bunch of money in your pocket, and then decide of you want to keep and take it to the next level, or sell it for a big payday and go get another one.
Have you ever watched any of the cooking shows such as Robert Irvine’s “Restaurant Impossible,” or Chef Ramsey’s “Hells Kitchen?” There are a couple others as well – “Hotel Impossible,” “Bar Rescue”, and Marcus Lemonis’s “The Profit.”
They all share the same theme – the business owner is working their butt off. They all made money in the beginning, and over a period of time, let things slide a little at a time, and now cannot recognize or identify the changes that need to be made.
All business is the same. They all operate the same way – the only difference is the product you deliver. No matter what business it is. The only difference between a manufacturing business in Detroit, a restaurant in Florida, and a Tug Boat operation in the Gulf of Mexico is the product they produce and deliver. They all need customers, they all need marketing, they all need competent management, they all need systems, and they all need customer follow up.
All you need is a methodical process to identify the obvious and a checklist to Identify Deficiencies, Uncover Hidden Assets, Capitalize on Opportunities, and then immediately take action.
There are 5 very specific areas of any business, and like spokes on a wheel a business needs all of them to support operations.
The picture here gives you a visual of what I mean by spokes on a wheel:
it has been my experience that every business I come across that is suffering and is ripe for a Business-Flip is missing one or more “spokes” of the wheel.
All you need to do is identify the missing part, fix it, and the rest takes care of itself.
Will you get rich?
I will not promise you that you’ll make millions over night or something foolish like that.
But I do believe (and have proven in my own experiences) that this is an amazing opportunity for any entrepreneur, business owner, professional or sales person to generate real wealth and set yourself up for your lifetime.
Yes, you can make millions if that is where you want to go, but will not happen overnight.
However, you will be in control of your destiny, not someone else, and I must tell you this …..
Not only is it patriotic, but it there is a very rewarding feeling knowing you are helping your local economy and the country by helping people save their jobs and supporting their families by saving their company.
Buying and flipping businesses delivers a much better return on your investment, can provide immediate cash flow and return, gives you more control over circumstances and outcomes, are easier to finance, much easier to come by, and there is no competition!
About The Author: Paul is a Business Consultant and provides Intermediary services in Florida.
He is in and out of businesses all of the time. Consulting, arranging succession plans, mergers & acquisitions, business valuations, and providing intermediary services for those who want to buy or sell.
If you’ve read this report this far and are reading this paragraph, then you are obviously very interested to learn more. I congratulate you for that.
You have also unknowingly pre-qualified yourself as a person I would be wiling to work with.
Which leads me to this ……. If you would like to learn how to Buy-Fix-and-Flip” Businesses, shoot me an email at Paul@BizBuyerBroker.com. We can set up a brief 10-12 minute phone call and see if there is positive energy for us to begin working together.