When it comes to buying a business, it can be easy to focus on ones that align with things you’re passionate about.
Maybe you’re obsessed with food, and looking for a high-class restaurant to manage. Perhaps you’ve got a passion for travelling, and want to buy a tourism business that will let you explore the world. But if you’re looking for a business that can give you financial stability while still providing a satisfying challenge day to day, don’t overlook the ‘boring’ businesses.
What makes a ‘boring’ business a good investment?
Businesses that operate in less glamorous industries come with many advantages. For starters, they often have a built-in customer base that is more likely to stick around if the business changes hands. This is especially true for businesses that provide regular, necessary services like car repair or window cleaning.
Having a stable base of existing customers means you can hit the ground running and start making a return on your investment quickly. On the flipside, an influx of new customers can sometimes mean long hours and unpredictable results as you try to figure out how to make them happy.
High levels of growth might seem like an asset when you’re searching for a business to buy, but in some cases it can be a liability.
Businesses providing these kinds of services are also resistant to downturns in the economy. Industries such as auto repair or window cleaning might not have huge margins for growth, but everyone will need their car fixed or their windows cleaned at least once a year. If you can please people once, you can convince them to come back and keep your business steadily growing even during difficult economic times.
High levels of growth might seem like an asset when you’re searching for a business to buy, but in some cases it can be a liability. If the business you’re thinking of buying is growing rapidly, you’ll pay a higher price for it – and with no guarantee that growth will continue. You’ll also be more likely to run into competitors, both during the buying process as well as post-sale, especially if you’re working in a new industry that is taking off or one that’s experiencing a sudden surge.
What kinds of ‘boring businesses’ are successful?
There are many kinds of boring business that consistently perform well, and are a safe bet for entrepreneurs thinking of buying. In many cases these businesses come with low overheads and do not require a lot of prior experience to operate, making them accessible choices for first-time entrepreneurs.
If you’ve got a dedicated mindset, some general management skills and are willing to learn – these businesses could be a potential goldmine. Below are a few examples of some successful types of boring business.
Laundromats
Laundromats are evergreen businesses with a low failure rate. Everyone will always need their clothes cleaned, making this a recession-resistant enterprise. They operate on a relatively simple business model, meaning if you can master the economies of scale involved, you can start turning a profit quickly.
As well as this, laundromats are self-sufficient businesses that don’t need a lot of micromanagement. They can be run remotely and with few employees, meaning you can operate them alongside another venture or part-time job.
Self storage
Self storage is another business that can be run effectively by a remote operator – especially with modern advancements in security and automated payment.
While it might seem quite cut and dry, self storage is still an industry with space (ahem) for experimentation. Recent disruptors like StashBee, which offers AirBnB-style flexible storage, prove that new ideas in this sector can be successful.
Car wash/repair
A car wash or repair business is one that does not require a huge marketing budget. Success will largely depend on your location and how effectively you can attract repeat customers that live nearby. It’s especially important to do your research about local demographics and your target audience.
Because of their potential to generate recurring, reliable revenue, these are also businesses with high resale potential. If you’re thinking of ‘flipping’ your business and launching another one, a car wash could be a good option.
Where can I find a ‘boring business’ to buy?
The BusinessesForSale.com categories page is as good a place to start as any. Try searching through the Services, Manufacturing or Engineering categories for businesses that might seem less eye-catching at first glance, but could be real hidden gems.
Tip: Keep an eye out for businesses that offer services unique to their area, or work in sectors where there are high barriers to entry for competitors - such as licenses or highly skilled staff.
Look for businesses which are growing slowly but at a consistent rate. Ask the seller about their customer base, and try to get an understanding of their reputation in the marketplace. Small businesses which provide regular, necessary services are often able to stand out in their respective sectors by building a reputation as reliable. They’re also less likely to be cut out when customers start looking at their balance sheet and making cuts to their expenses.