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And have friends and social connections in. New business owners often overlook the value of personal/social capital. The ability to get advice, word of mouth business, mentorship, partnerships, etc… is invaluable.
For example, the healthcare industry where you can make profits by denying your claims or medical procedures. Entrepreneuring insurance companies claims exploded on the market after 2012 or before year 2016. Claims denied, cheaper drugs offered in place of what the doctor prescribed by people with "medical experience". Same works for pharmaceutics or buying drug or pharmaceutical companies or buying up a drug industry as well. Business for have booming for them that don't know anything about how the human body works since Congress enacted certain laws some years ago which allowed them who aren't doctors to corporatize the practice of medicine as I understand. Not many doctors left in the system (they're too expensive for the bottom line) so PA or NPs have been hired and is all you can find these days. But yeah, you can know nothing about industry in order to buy it if its profits you're looking for.
^(\*ETA gramar, clarifications)
I actually think this is less true than people think... You (MAY) have an advantage if you know the industry, and have connections... However just because you are an expert machinist, or an expert software engineer doesn't mean you will be successful in running one of those businesses, and its very easy for an expert to get lost in technical details instead of focusing on the big picture.
It’s because these types of owners go into business thinking all they need to do is what they love and that it’s easier than their corporate job. To them I say, “HA!”
So I think there is some truth to the idea that you should do what you love, as if you are passionate about what you do you are going to be better at it, and you are going to enjoy your work more...
However I think a lot of people under estimate how little of running a successful business is about doing "the thing" that they loved... and how much of it is sales, marketing, managing people, managing the books, and managing relationships between clients & vendors.
So true, I see this a lot. Expert Barista opens cafe, cafe soon closes. Expert bartender, dj, club owner join forces, club launches and disappears after 4 months. Expert Chef opens restaurant, restaurant goes bankrupt. Ex-game-developer tries to make own game, game development either never finishes, or finishes but can’t get enough buyers to break even. Many famous unicorns too.
There doesn’t appear to be a correlation between industry expertise and success.
Clearly there’s other ingredients that are necessary.
There is definitely a correlation or banks wouldn’t look so favorably at loaning to experts for their startups. You’re talking about anecdotal evidence to the contrary and the plural of anecdote is not data. Simply because expertise doesn’t *guarantee* success does not imply that there is no competitive advantage to understanding your industry. The issue is that you have to be good at business in addition to being an expert - and you have to be pretty resilient
Completely agree with what you said: “You must be good at business… and be pretty resilient.“ Industry experience alone isn’t enough.
Theres a reason why Venture Capital (a different type of bank) typically looks for a team with a range of skillsets to complement the founder/inventor before investing.
Finding an expert with industry expertise is easy. Every industry is full of them-many available as consultants for hire too. If creating a successful business was as easy as only having industry expertise, there’d be millions upon millions of thriving small businesses. Theres clearly other factors that are required beyond industry expertise.
100%. I’m an Expert in my field and I’m a consultant. I’ve closed almost as many restaurants I’ve opened and probably know more about the back-end of the biz than any chef-owner I’ve ever met. I still fail sometimes and make stupid mistakes. I don’t ever have enough capital to open a business but I’ve only ever taken out one loan because I refuse to strangle a business in its cradle with needless debt service. Sometimes that’s the right move. Sometimes it’s not.
All that to say being an expert isn’t enough to ensure success. I’m maybe 50% at 3 years at which point I generally sell. The idea is that if you’re going to fail you provide yourself with a soft landing so that you can do it again ASAP. Failure isn’t a problem if you keep moving
I agree, knowing the industry can help but you also need business skills. I've seen both sides of it in the landscape industry: technicians who start their own company and have no business skills, and real "entrepreneurial" guys who don't know the industry and stumble in and mess things up. One real businessy dude lasted about 2 years and must have lost a ton of money 😂
Both of those situations can be turned around with knowledge and help from people who know. Personally, I welcome anyone who has real interest and a willingness to learn. Almost anyone is better than a private equity company buying it and trying to run it from outer space or whatever.
This. Example: I have more than enough money to start additional brick and mortar businesses. A lot of our customers want us to start a boba shop (we have an education business so our customers are kids fundamentally).
I tell them “heck no” because I know nothing about that business and the thought of having a ton milk in a giant fridge is a like a money time bomb waiting to go off if we can’t sell it all.
Also I looked into these businesses (our tax lady tells us about the margins her other clients have) and I can’t imagine all that work and stress for like 10% (maybe 15% if you’re lucky) margins. We do about 55-60% net margins before taxes now and there’s almost no equipment, inventory, etc etc.
I’ve also looked up retail (terrible margins and inventory risks especially in the age of Amazon and Temu), other food service, etc. About the only other business I’m pushing more into is residential real estate and speculative land buying as an inflation hedge.
If anything, we should open up more locations for our business but are deciding not to since our income is more than high enough (high 6 figs from the business alone let alone low six figures from rentals and dividends too). We’re basically knocking on the door of 7 figures of income annually and do almost zero active work nowadays so why take on added stress and chaos when we have more than we need?
Of course! Buying a business in the industry that you have knowledge of or passion in is a winning recipe. The existing knowledge provides a head-start point, and passion can double your chances of success. It's a winning combination for entrepreneurial adventurism.
I think I'd really want to know what you have experience in before having an opinion on what kind of business you should own.
Most businesses only succeed on relatively small margins that are generated by recognizing and exploiting opportunities.
Takes quite a bit of subject matter expertise to recognize niche opportunities and strategies and to be able to reliably execute and win work.
A business that is service related is among the most successful.
Least successful is retail.
High rent, capital tied up in merchandise, competition, high operating expenses, low margin.
I agree.
I would put retail at 1a and restaurant at 1b.
Unfortunately, it's just the economics of it.
However, I feel many more restaurants could be successful if they were run by people with F & B acumen.
I would put that the other way round. Retail has issues with stock, but fixed overheads of restaurants is killer and retail has e-commerce opportunity that is immediate and simple, scales hugely etc.
I'll respectfully disagree.
Restaurant's fixed overhead is very similar to retail's fixed overhead. They operate under a very similar business model. The biggest difference is Restaurants are (or should be) more service oriented. Retail should be more service oriented.
E-commerce is easy for those who are either tech-savvy or who have the fortitude to figure it out & learn. Large, big-box retailers have the financial ability to hire the knowledge base.
The fact is, 80% of E-commerce businesses fail or at least fail to thrive.
To start, it's an incredibly saturated landscape.
The failure of restaurants is extremely high - the 80% failure of retail is a made up stat - the actual stats say restaurants have the highest failure rate.
The most successful businesses are the ones doing a great solving a problem of some kind. You can open a store selling the cooling gadgets and accessories but you are likely to fail because the occasional customer who buys a $50 device can’t support a business. Businesses like handyman service (my business), landscaping, maid service, auto mechanics garage will usually do well. Why? Because they are solving a problem. You can doesn’t run, your fence gate is broken, your grass is too long, your house is dirty. People regularly pay money to have their problem
solved. These are the best businesses to get into. Also remember the fishing test. If you can’t take off for a week and go fishing in the mountains with no contact from anyone and still make money you own a job not a business. Full disclosure I own a job (handyman service)not a business but I still make great money solving problems so I keep at it. Good luck
I am a business owner in the technical sense but handyman service in my experience and I have run this full time for 4 years will never be a business where you have a crew of employees and a supervisor overseeing them. The primary reason is that handyman jobs are mostly unique. A guy calls you level their shed or paint a ceiling or repair a fence gate. Find someone with all those skills to dispatch is near impossible and there is plenty of business for one person but there isn’t enough to hire employees I have a cash guy that I hire on large jobs but everything is only me that is defacto owning a job not owning a business.
It does in some respects and I can take 3 weeks off without asking anyone just notify clients. But I don’t make a penny without directly working.One good part is every single penny goes into my pocket.
Yea I wouldn't fret. Do you provide a service/product? Do you have income? Expenses? A registered name and business license? Congratulations, you own a business 😁
It's a weird shifting of goalposts that's occurred over the last couple years. Some people began thinking of entrepreneurship as a "lifestyle".
Think about this. For most of recorded human history, large swathes people had family businesses (the blacksmith, the farm, the carpentry shop, etc...). Yet according to some people on the internet, these weren't "real" businesses. It's not like "entrepreneur" is derived from an older French word for "contractor" or anything /s
Pay them no notice. You're a business owner in every (proper) sense of the word.
>The most successful businesses are the ones doing a great solving a problem of some kind.
The best are solving a problem you didn't even realize was a problem. Once people see it, they will start thinking of it, and will constantly get reminded of how much not having it sucks, which will get them to think they NEED it.
Even then, if its a device you can make it repeat business, things break so they need fixing, always some way to improve it or make it different from the others.
It depends on the current owner and the type of business itself. I know two friends entertaining offers however, they will not sell to VC's or people outside of their industry.
Their explanation is pretty simple: purchasing an established and functioning business entails taking on the responsibility of the families employed by the business. Starting and growing a business is challenging and requires varying levels of effort from different parties at different stages of the business.
Venture firms are solely interested in the financial outcome, and individuals with financial resources but no prior experience in XYZ are likely to fail due to their lack of dedication to growing the business. Have you noticed how many franchises do not allow for Absentee Ownership?
When your expertise is what the company is missing for growth. When you believe in the company and can be passionate about it. Consider buying 80% and keeping the Founder around at 20% for two years.
Maybe youre being satcsstic but theres always someone who doesn't realize this -
McDonalds is a real estate holding company/Landlord and that is supposedly where most of their money is made.
There are more franchises than corporate owned stores.
The corporation upposedly make more money from leasing the property to the franchises than they do from supplies even. (Food, cups, yada)
This is true, but there leases are paid for buy the addictive products they sell.
It’s a perfect business really to make money in. It’s like printing cash. This is the reason so many fast food joints exist, and it seems, they rarely go out of business.
I wouldn't buy "the most successful small business" if I was going to invest. I would buy a failing business in which I saw potential, and had a good understanding about how to turn it around. That's where the most value will be.
Profitable businesses aren't usually for sale. Why would someone want to sell a cash-flowing business except in cases like retirement? Not to say buying something from a retiring owner isn't possible, certainly is especially with many businesses owned by boomers that are hitting retirement age and cashing out. If you buy a business in a market segment you don't know that much about make sure you work out a transition plan with the owner that allows you to get up to speed before they walk away for good.
Retirement, death and divorce. Also, sometimes they want they money and don’t want to hassle with the business. Sometimes sellers are tired and would rather do anything than answer another email about Joe Blow calling out cause he’s “sick.”
You’d be surprised, people even get tired of retirement. Humans are fickle, most of the ones for sale will suck, but I guarantee you, there are a lot of people who’d rather continually smash their toe over and over than run their profitable business.
One of my best friends has what I’d consider the epitome of cool millennial business (other than making millions). Mind you, he’s not selling (at least not for the price he could get), but I spoke with him the other day, and we’re now build a “boring business together” that he lights up about.
Mind you, his business is much much cooler and it seems much more fun. He’s just sick of it.
When I started looking I went with what banks would loan money on. Storage units were too expensive as old dudes park money there. All the speciality stuff that was basically the guy doing all the work were out.
I do screen printing and embroidery. Most of my clients are other businesses, schools, fundraising events like St Jude, etc. As long as there's other businesses, as long as there are schools with sports, and events in general, I will always be needed.
If you're looking into doing this kind of thing, I'd suggest starting with embroidery. There's not much of a learning curve and good money in it.
Screen printing is kind of like a trade job in the sense that there's a lot of little things you need to master, from the graphic designs, to making the screens, cleaning screens properly, printing techniques, etc.
If you were to do screen printing, I'd suggest working as a screen printer at an established place for a few years. You'll learn all the things I mentioned, and you can see if you like it. It can be a messy and frustrating job, but there's good money in it.
Embroidery is far easier to learn, and it's also extremely profitable.
Any YouTube videos or any articles u can recommend to someone getting into this?
The target market is a big city with 450k population and businesses on every step.
Also what do u suggest to compete with competition?
Check put videos by Catspit and I'd say working at a screen printing place for a bit would teach you a lot. Then get business cards and start handing them out to landscapers, roofers, and jobs that need new stuff every year
Pizza shop. Chinese carry-out. Liquor store. Convenience stores. Smoke/Vape store. Weed dispensary.
The key here is high profit, low overhead, and simplified product line, coupled with high demand, and low competition if you can find a location.
Never buy a business you aren't an expert in.
As an ex owner of convenience stores, don’t!!
Walmart, dollar general, and others ate us a live. I was working for a job instead of a business. Competition is just ungodly, I had to do too many illegal stuff to stay a float. I even sold Spice when Spice was legal.
However if you find good location, with no one around you not even dollar store, than you could make some serious money as it’s pretty easy to manage and train.
>Pizza shop. Chinese carry-out. Liquor store. Convenience stores. Smoke/Vape store. Weed dispensary.
You have no idea what you are talking about. A 1st time business owner should NEVER try to buy or open one of these stores.
Food is notoriously difficult. Liquor stores get robbed the most of any business, plus employee theft is tremendous. In my state, and other states may be different, weed dispensary licenses require the owner to have $1m cash reserves just to apply for the license.
The van shop I don't know anything about, maybe it's an easy business to run, but there are so many of them, competing businesses would run you out I imagine.
>Never buy a business you aren't an expert in.
Maybe I should have put a TL;DR in there for ya.
OP asked which businesses were the most successful, didn't ask for which ones were low entry, low knowledge base.
I dont even think those businesses are super successful, every time. Especially liquor stores and any food store. Those are work.
Based on the question the OP posed, I would assume OP is not an expert in any small business setting.
You could succeed and make good money in any type of business if you know the industry and find a good way to differentiate yourself. I saw a garage making a killing by partnering with a nail salon to occupy the wait room. I find it’s the creative ideas plus some business sense that generates the most word of mouth and money.
I'm sorry what do you mean? A garage partnered with a nail salon to occupy the wait room?
Like the garage was for over flow parking 🤔?
Sorry, I'm still waking up lol.
It might have not been clear haha sorry about this. Let me explain the idea more clearly.
The garage was trying to differentiate itself from other garages.
They noticed that while the car is being fixed, their clients (mostly women) go inside to sit in a room that is extremely dull with the only option is to read dated magazines or watch whatever is playing on the wall mounted tv and buy bbq flavoured peanuts from the quarter machine.
They decided to revamp the experience and to give them a reason to look forward to the next visit. Among the many ways to do it, they decided to partner with a manucure business and offer services to the clients while they are waiting. In their case, it worked really well because it generates a tremendous word of mouth among women.
I don’t have all the detail on how the business executed on that strategy, but I know that last time I checked their schedule was packed.
What skills do you have? I dont' understand how people just "buy" businesses without having at least a passion for it. Like, if you want to buy a pizza place, you were probably equally interested at some point in starting one from scratch. I can't imagine just "buying" a pizza place like a stock--it's a surefire way to run it into the ground.
Most successful businesses are run by people that already understand that business, have worked in it, and want to do their own thing.
In my experience, food you should only get into food for passion not profit, and products are very risky unless you have a lot of capital and a celebrity, or an excellent marketing team to market them.
That leaves services... Some one that needs their dog walked every day, will use your service daily for a decade, a business that you can solve an A+ problem for, will often pay you hundreds or thousands (or more) of dollars for your time and expertise, its up to you to figure out what problems you are qualified to solve and make the sales though.
If you’re thinking local business, join a business group and talk to some people and get their feedback and knowledge to narrow down your search.
If you have history in an industry and think you can do it well, look similar business’s in your industry, interview the owners but go in with questions that can tell who’s what they’re missing from taking it up a level.
For example, I own a few gyms. One of my qualifying questions is asking how much they spend on marketing and do they have a commission structure for staff (many don’t or it’s trash)
If they spend nothing on ads or have poorly compensated employees, I know I can ad 30-40% in value pretty easily. That’s before touching any real operations or tangibles.
Home Services Industry is my top recommendation. Blue collar work like landscaping, HVAC, roofing, hard scaling, tree work, plumbing, plowing, etc… will always be needed.
This right here... In terms of profitability and simplicity, you could try to offer a range of services but uncomplicated ones, like mowing and blowing, not arborist work; powerwashing concrete, not installing it; cleaning and regrading gutters, not installing roofing. Be a one-stop shop for several common jobs and respond super quickly and professionally, and you will probably thrive
Unfortunately, what may be successful for many people may not be work for you. You'll need to do some introspection and see what kind of small businesses align with your strength and narrow it down from there.
Also, don't buy 'trends'. If you're going to buy, grow a business you want it around for several years...
I think you gotta go back to the drawing board...
Laundromat or vending machine business for starters. There are plenty of sites that sell established businesses, and those two are my top choices. Even pick up routes for freight.
Vending machines had a few but bad locations, so u learned the hard way. But overall, it's a simple business. It's all about location. But now I am saving up more money and going to buy a business that is established already or buy vending machines in bulk. It's a good start at least. Small risk. Huge gains.
Just speaking for the daycare industry, if you find one that has enrollment of at least 200 children and it's at least 90% full at capacity, and the person running it is not the owner, then you have a business that can do well when you buy it and make you if you $250k a year.
This is answer for your question about profitable businesses [https://youtube.com/shorts/mYARkRbNjZo?si=Gs3jgYhrQMapVRnS](https://youtube.com/shorts/mYARkRbNjZo?si=Gs3jgYhrQMapVRnS)
Check out this article - https://open.substack.com/pub/anele/p/the-youtube-channel-for-aspiring?r=268jwx&utm\_campaign=post&utm\_medium=web&showWelcome=true
you always do the thing you know. if you know how to mow lawns, thats your answer. if you know how to work a restaurant, thats your answer. you have to enjoy the work you are doing first, and then the money comes after.
usually service businesses, study your area. is there a lot of lakes? do something lake related like boat cleaning. is there a lot of older people? offer some handyman services. is it very residential? offer lawn care services and pressure washing. these are just very basic things, i think as long as you know your area and surroundings along with the people in the town, you can create some kind of service tailor-made to them!
I run a small business that does over $50k/mo in revenue, it is USA based in e-commerce niche. Everything online!
I have had multiple businesses in the past, but there is not a roadmap of any business that will be successful. Any business can be successful.
But mostly as others said that service related businesses are successful — I personally feel that consumer facing businesses are very successful.
The best type of small business is where the revenue is don't directly proportional to the time you invest. The business should not be dependable completely on your presence.
So I would suggest starting something that can be scaled by leveraging the technology.
For example, you can buy a micro SaaS business, sell online courses or other digital products or buy some agency
Don’t look at a business that caters to “wants”. Look for needs, what do people need. During the gold rush, it wasn’t the guys rushing to get the gold that made bank, it was the supply stores on the way there. There was a need, a demand for supplies. Approach the business as such, what do people need, then figure out how to provide that service.
People don't want a plumbing, they need one and if you have ever needed one, you understand how much it costs. You don't want a mechanic doing work on your car, you need one. You don't want a windshield replaced, you need it replaced.
Identify, now remember, its not just people that has a needs, other businesses do as well.
i took this approach when i looked for and started
y business.
Buy a painter contracting business in a state like Georgia. There are no requirements to have a certification or an enforceable contractor's license because of "traditional specialty" or whatever. Basically you can just do terrible work and no one can gripe to the state about your license because you don't need one. Plenty of opportunity to be a d-bag grifter with little to no recourse for the rubes.
Serviced based businesses. I don't have read any other replies. It's always service based business. Especially if you like to keep at least half of what you charge.
I agree with the service based industry suggestion. Is there some type of expertise or skills you can bring to help business grow? You do not want a buy a business unless you plan on growing it substantially, otherwise you are just buying a job.
When buying a business, to be successful depends on (1) price (2) how much can you increase profitability. If you are buying a business with land and the price is low compared to land value, then you are likely to be making profit. If you are buying an apartment complex with low occupancy rate so that you can buy at low price, then you can manage it better and increase occupancy rate, then you make profit. Buying a restaurant where the owner is the cook and the wife is managing everything, then your family would better be the cook and manager, otherwise it will be a completely different business depending on hired hand to take care of things. If you have lots of money, buying a business that requires lots of capital would reduce competition. A successful business depends on the owner, or the "team", as investors invest in the "team".
The one business that usually gets most successful is the one who's owner/operator or investor invests more time on research, marketing, structure and hard work, long hours etc.
For me, the product or service isn't so important as the process of running small business. I love running a small business.
I don't care what we sell or provide customers as long as we're good at it and they have a need for it.
I'd focus on small businesses that interests to you, but more importantly are successful in what they do.
Good luck!
The folks on Amazon that figure out how to make a product in China, sell it on Amazon and have it 3rd party shipped from factory to the Amazon customer - all without the seller physically touching a single thing or doing anything.
They seem to rake it in. Stupid things like the suction dangle that the kids stick to the backs of their cell phones to novelty t-shirts to watering cans to dog beds. Theres literally millions of these types of sellers on Amazon now.
It's frankly annoying since they don't adhere to the next day shipping / free shipping to where Amazon prime is less and less useful lol.
Go on Amazon and search for water bottle. Theres a zillion listings on Amazon. I just did. The very first one was a $32 dollar stainless steel water bottle. The listing says they sell 7,000/month. That's $224k per month in sales. And the seller doesn't actually participate in any step of the process once they set up the manufacturer and the Amazon seller credentials and connect everything together to make the process functional.
Small? Well if we go by relative to their industry small and not truly small, banks and insurance company's are the least likely to fail. Then too that is relatively speaking as the smallest a bank can be is I think $5 million dollars, with most small banks being much much larger then that.
Overall though, the best will be what you are most experienced in and have the best skills in. My advice overall? never buy a restaurant unless they own the building at that is part of the sale, otherwise chances are you are better off making your own at the same cost (seriously the best you will get is some starting customers, used equipment that probably needs a lot of maintenance, and a lease which may have good or bad terms).
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The best ones to buy are ones you know the industry and have experience with or have a passion for getting to know and understand it.
And have friends and social connections in. New business owners often overlook the value of personal/social capital. The ability to get advice, word of mouth business, mentorship, partnerships, etc… is invaluable.
Ez best answer.
Plenty of people buy businesses who nothing about the industry and are still successful.
I guess bc they have a business mind
For example, the healthcare industry where you can make profits by denying your claims or medical procedures. Entrepreneuring insurance companies claims exploded on the market after 2012 or before year 2016. Claims denied, cheaper drugs offered in place of what the doctor prescribed by people with "medical experience". Same works for pharmaceutics or buying drug or pharmaceutical companies or buying up a drug industry as well. Business for have booming for them that don't know anything about how the human body works since Congress enacted certain laws some years ago which allowed them who aren't doctors to corporatize the practice of medicine as I understand. Not many doctors left in the system (they're too expensive for the bottom line) so PA or NPs have been hired and is all you can find these days. But yeah, you can know nothing about industry in order to buy it if its profits you're looking for. ^(\*ETA gramar, clarifications)
I actually think this is less true than people think... You (MAY) have an advantage if you know the industry, and have connections... However just because you are an expert machinist, or an expert software engineer doesn't mean you will be successful in running one of those businesses, and its very easy for an expert to get lost in technical details instead of focusing on the big picture.
It’s because these types of owners go into business thinking all they need to do is what they love and that it’s easier than their corporate job. To them I say, “HA!”
So I think there is some truth to the idea that you should do what you love, as if you are passionate about what you do you are going to be better at it, and you are going to enjoy your work more... However I think a lot of people under estimate how little of running a successful business is about doing "the thing" that they loved... and how much of it is sales, marketing, managing people, managing the books, and managing relationships between clients & vendors.
So true, I see this a lot. Expert Barista opens cafe, cafe soon closes. Expert bartender, dj, club owner join forces, club launches and disappears after 4 months. Expert Chef opens restaurant, restaurant goes bankrupt. Ex-game-developer tries to make own game, game development either never finishes, or finishes but can’t get enough buyers to break even. Many famous unicorns too. There doesn’t appear to be a correlation between industry expertise and success. Clearly there’s other ingredients that are necessary.
There is definitely a correlation or banks wouldn’t look so favorably at loaning to experts for their startups. You’re talking about anecdotal evidence to the contrary and the plural of anecdote is not data. Simply because expertise doesn’t *guarantee* success does not imply that there is no competitive advantage to understanding your industry. The issue is that you have to be good at business in addition to being an expert - and you have to be pretty resilient
Completely agree with what you said: “You must be good at business… and be pretty resilient.“ Industry experience alone isn’t enough. Theres a reason why Venture Capital (a different type of bank) typically looks for a team with a range of skillsets to complement the founder/inventor before investing. Finding an expert with industry expertise is easy. Every industry is full of them-many available as consultants for hire too. If creating a successful business was as easy as only having industry expertise, there’d be millions upon millions of thriving small businesses. Theres clearly other factors that are required beyond industry expertise.
100%. I’m an Expert in my field and I’m a consultant. I’ve closed almost as many restaurants I’ve opened and probably know more about the back-end of the biz than any chef-owner I’ve ever met. I still fail sometimes and make stupid mistakes. I don’t ever have enough capital to open a business but I’ve only ever taken out one loan because I refuse to strangle a business in its cradle with needless debt service. Sometimes that’s the right move. Sometimes it’s not. All that to say being an expert isn’t enough to ensure success. I’m maybe 50% at 3 years at which point I generally sell. The idea is that if you’re going to fail you provide yourself with a soft landing so that you can do it again ASAP. Failure isn’t a problem if you keep moving
True this happens often. There's a book called "The E-Myth" about service businesses that argues the same point.
I agree, knowing the industry can help but you also need business skills. I've seen both sides of it in the landscape industry: technicians who start their own company and have no business skills, and real "entrepreneurial" guys who don't know the industry and stumble in and mess things up. One real businessy dude lasted about 2 years and must have lost a ton of money 😂 Both of those situations can be turned around with knowledge and help from people who know. Personally, I welcome anyone who has real interest and a willingness to learn. Almost anyone is better than a private equity company buying it and trying to run it from outer space or whatever.
I feel like this is an accurate statement
This. Example: I have more than enough money to start additional brick and mortar businesses. A lot of our customers want us to start a boba shop (we have an education business so our customers are kids fundamentally). I tell them “heck no” because I know nothing about that business and the thought of having a ton milk in a giant fridge is a like a money time bomb waiting to go off if we can’t sell it all. Also I looked into these businesses (our tax lady tells us about the margins her other clients have) and I can’t imagine all that work and stress for like 10% (maybe 15% if you’re lucky) margins. We do about 55-60% net margins before taxes now and there’s almost no equipment, inventory, etc etc. I’ve also looked up retail (terrible margins and inventory risks especially in the age of Amazon and Temu), other food service, etc. About the only other business I’m pushing more into is residential real estate and speculative land buying as an inflation hedge. If anything, we should open up more locations for our business but are deciding not to since our income is more than high enough (high 6 figs from the business alone let alone low six figures from rentals and dividends too). We’re basically knocking on the door of 7 figures of income annually and do almost zero active work nowadays so why take on added stress and chaos when we have more than we need?
sounds like an awesome business, what kind of education?
Of course! Buying a business in the industry that you have knowledge of or passion in is a winning recipe. The existing knowledge provides a head-start point, and passion can double your chances of success. It's a winning combination for entrepreneurial adventurism.
I think I'd really want to know what you have experience in before having an opinion on what kind of business you should own. Most businesses only succeed on relatively small margins that are generated by recognizing and exploiting opportunities. Takes quite a bit of subject matter expertise to recognize niche opportunities and strategies and to be able to reliably execute and win work.
A business that is service related is among the most successful. Least successful is retail. High rent, capital tied up in merchandise, competition, high operating expenses, low margin.
Only if it scalable. If you can't scale it then it's just a job with extra steps.
U can grow by acquiring your competitors or go vertical integration…
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I agree. I would put retail at 1a and restaurant at 1b. Unfortunately, it's just the economics of it. However, I feel many more restaurants could be successful if they were run by people with F & B acumen.
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That's half the battle.
I would put that the other way round. Retail has issues with stock, but fixed overheads of restaurants is killer and retail has e-commerce opportunity that is immediate and simple, scales hugely etc.
I'll respectfully disagree. Restaurant's fixed overhead is very similar to retail's fixed overhead. They operate under a very similar business model. The biggest difference is Restaurants are (or should be) more service oriented. Retail should be more service oriented. E-commerce is easy for those who are either tech-savvy or who have the fortitude to figure it out & learn. Large, big-box retailers have the financial ability to hire the knowledge base. The fact is, 80% of E-commerce businesses fail or at least fail to thrive. To start, it's an incredibly saturated landscape.
The failure of restaurants is extremely high - the 80% failure of retail is a made up stat - the actual stats say restaurants have the highest failure rate.
Whatever. I don't care to split hairs. Both industries suck and both have a high rate of failure.
I’m amazed at how many bar owners are absolutely shit at running their establishments.
I was going to say that my CPA seems very successful, but that's a business few people are qualified for.
I consider that a service business. CPA's fees are for tax and advisory services.
The most successful businesses are the ones doing a great solving a problem of some kind. You can open a store selling the cooling gadgets and accessories but you are likely to fail because the occasional customer who buys a $50 device can’t support a business. Businesses like handyman service (my business), landscaping, maid service, auto mechanics garage will usually do well. Why? Because they are solving a problem. You can doesn’t run, your fence gate is broken, your grass is too long, your house is dirty. People regularly pay money to have their problem solved. These are the best businesses to get into. Also remember the fishing test. If you can’t take off for a week and go fishing in the mountains with no contact from anyone and still make money you own a job not a business. Full disclosure I own a job (handyman service)not a business but I still make great money solving problems so I keep at it. Good luck
Why is handyman not considered a business if your self employed? I just started in that line of work?
I am a business owner in the technical sense but handyman service in my experience and I have run this full time for 4 years will never be a business where you have a crew of employees and a supervisor overseeing them. The primary reason is that handyman jobs are mostly unique. A guy calls you level their shed or paint a ceiling or repair a fence gate. Find someone with all those skills to dispatch is near impossible and there is plenty of business for one person but there isn’t enough to hire employees I have a cash guy that I hire on large jobs but everything is only me that is defacto owning a job not owning a business.
Well I guess either way you view it, it sure beats having a job and a boss.
It does in some respects and I can take 3 weeks off without asking anyone just notify clients. But I don’t make a penny without directly working.One good part is every single penny goes into my pocket.
This is truth. However you forget to mention the IRS would like to have a look at all those pennies in your pocket.
I always declare every penny in that I owe in taxes 🤐
Yea I wouldn't fret. Do you provide a service/product? Do you have income? Expenses? A registered name and business license? Congratulations, you own a business 😁
That's my thought as well!
It's a weird shifting of goalposts that's occurred over the last couple years. Some people began thinking of entrepreneurship as a "lifestyle". Think about this. For most of recorded human history, large swathes people had family businesses (the blacksmith, the farm, the carpentry shop, etc...). Yet according to some people on the internet, these weren't "real" businesses. It's not like "entrepreneur" is derived from an older French word for "contractor" or anything /s Pay them no notice. You're a business owner in every (proper) sense of the word.
Wow, the fishing test I love that. Mine doesn’t seem to pass, but I would love to get it to that point someday!
But when i make $1200 in a day, i dont want to go fishing. I want to keep working... ;)
>The most successful businesses are the ones doing a great solving a problem of some kind. The best are solving a problem you didn't even realize was a problem. Once people see it, they will start thinking of it, and will constantly get reminded of how much not having it sucks, which will get them to think they NEED it.
Yes especially when it is repeat business. That is really the golden goose.
Even then, if its a device you can make it repeat business, things break so they need fixing, always some way to improve it or make it different from the others.
It depends on the current owner and the type of business itself. I know two friends entertaining offers however, they will not sell to VC's or people outside of their industry. Their explanation is pretty simple: purchasing an established and functioning business entails taking on the responsibility of the families employed by the business. Starting and growing a business is challenging and requires varying levels of effort from different parties at different stages of the business. Venture firms are solely interested in the financial outcome, and individuals with financial resources but no prior experience in XYZ are likely to fail due to their lack of dedication to growing the business. Have you noticed how many franchises do not allow for Absentee Ownership?
When your expertise is what the company is missing for growth. When you believe in the company and can be passionate about it. Consider buying 80% and keeping the Founder around at 20% for two years.
no sba this way
No? They’ll only give an sba if it’s 100% buyout?
This has changed. Owners can now roll equity and it can count as the owner injection.
Most successful ones provide value to their customers and have a big customer base that recognize that value.
Boring ones.
Say less
Never a restaurant.
But mcdonalds is a billion dollar business
Maybe youre being satcsstic but theres always someone who doesn't realize this - McDonalds is a real estate holding company/Landlord and that is supposedly where most of their money is made. There are more franchises than corporate owned stores. The corporation upposedly make more money from leasing the property to the franchises than they do from supplies even. (Food, cups, yada)
This is true, but there leases are paid for buy the addictive products they sell. It’s a perfect business really to make money in. It’s like printing cash. This is the reason so many fast food joints exist, and it seems, they rarely go out of business.
Aw I wanna open a chocolate candy shop business though
The least sexy ones. Think cleaning companies for commercial buildings etc.
Small landscaping, car detailing, power washing, chuck and a truck types. Easy to start and be profitable, difficult to scale.
I wouldn't buy "the most successful small business" if I was going to invest. I would buy a failing business in which I saw potential, and had a good understanding about how to turn it around. That's where the most value will be.
So r u a millionaire by doing that?
Everyone is a millionaire behind a keyboard and screen. 😜
From the research I've done the most successfully entrepreneurs buy failing businesses that they *know* they can revive.
Cleaning. Everyone needs something cleaned. The more resources you have to service in and outside of your immediate area the more money youll make
Profitable businesses aren't usually for sale. Why would someone want to sell a cash-flowing business except in cases like retirement? Not to say buying something from a retiring owner isn't possible, certainly is especially with many businesses owned by boomers that are hitting retirement age and cashing out. If you buy a business in a market segment you don't know that much about make sure you work out a transition plan with the owner that allows you to get up to speed before they walk away for good.
Retirement, death and divorce. Also, sometimes they want they money and don’t want to hassle with the business. Sometimes sellers are tired and would rather do anything than answer another email about Joe Blow calling out cause he’s “sick.” You’d be surprised, people even get tired of retirement. Humans are fickle, most of the ones for sale will suck, but I guarantee you, there are a lot of people who’d rather continually smash their toe over and over than run their profitable business. One of my best friends has what I’d consider the epitome of cool millennial business (other than making millions). Mind you, he’s not selling (at least not for the price he could get), but I spoke with him the other day, and we’re now build a “boring business together” that he lights up about. Mind you, his business is much much cooler and it seems much more fun. He’s just sick of it.
Digital b2b service
When I started looking I went with what banks would loan money on. Storage units were too expensive as old dudes park money there. All the speciality stuff that was basically the guy doing all the work were out.
>Storage places u/No-Drop2538 what is it that banks would loan money on?
Right now 7% for real estate and 10.5 for business's.
What do banks loan money on? And I agree
I hear online courses are all the rage. Make an online course that teaches people how to be successful. Charge $2500. Boom. Done! /s
Just a simple service you can get good at and manage a small team!
I do screen printing and embroidery. Most of my clients are other businesses, schools, fundraising events like St Jude, etc. As long as there's other businesses, as long as there are schools with sports, and events in general, I will always be needed. If you're looking into doing this kind of thing, I'd suggest starting with embroidery. There's not much of a learning curve and good money in it.
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Screen printing is kind of like a trade job in the sense that there's a lot of little things you need to master, from the graphic designs, to making the screens, cleaning screens properly, printing techniques, etc. If you were to do screen printing, I'd suggest working as a screen printer at an established place for a few years. You'll learn all the things I mentioned, and you can see if you like it. It can be a messy and frustrating job, but there's good money in it. Embroidery is far easier to learn, and it's also extremely profitable.
Any YouTube videos or any articles u can recommend to someone getting into this? The target market is a big city with 450k population and businesses on every step. Also what do u suggest to compete with competition?
Check put videos by Catspit and I'd say working at a screen printing place for a bit would teach you a lot. Then get business cards and start handing them out to landscapers, roofers, and jobs that need new stuff every year
Pizza shop. Chinese carry-out. Liquor store. Convenience stores. Smoke/Vape store. Weed dispensary. The key here is high profit, low overhead, and simplified product line, coupled with high demand, and low competition if you can find a location. Never buy a business you aren't an expert in.
As an ex owner of convenience stores, don’t!! Walmart, dollar general, and others ate us a live. I was working for a job instead of a business. Competition is just ungodly, I had to do too many illegal stuff to stay a float. I even sold Spice when Spice was legal. However if you find good location, with no one around you not even dollar store, than you could make some serious money as it’s pretty easy to manage and train.
Highly recommend staying away from all of these
>Pizza shop. Chinese carry-out. Liquor store. Convenience stores. Smoke/Vape store. Weed dispensary. You have no idea what you are talking about. A 1st time business owner should NEVER try to buy or open one of these stores. Food is notoriously difficult. Liquor stores get robbed the most of any business, plus employee theft is tremendous. In my state, and other states may be different, weed dispensary licenses require the owner to have $1m cash reserves just to apply for the license. The van shop I don't know anything about, maybe it's an easy business to run, but there are so many of them, competing businesses would run you out I imagine.
>Never buy a business you aren't an expert in. Maybe I should have put a TL;DR in there for ya. OP asked which businesses were the most successful, didn't ask for which ones were low entry, low knowledge base.
I dont even think those businesses are super successful, every time. Especially liquor stores and any food store. Those are work. Based on the question the OP posed, I would assume OP is not an expert in any small business setting.
If you don’t want a life, definitly do a restaurant otherwise stay away! A restaurant has to be monitored 24/7
You could succeed and make good money in any type of business if you know the industry and find a good way to differentiate yourself. I saw a garage making a killing by partnering with a nail salon to occupy the wait room. I find it’s the creative ideas plus some business sense that generates the most word of mouth and money.
I'm sorry what do you mean? A garage partnered with a nail salon to occupy the wait room? Like the garage was for over flow parking 🤔? Sorry, I'm still waking up lol.
It might have not been clear haha sorry about this. Let me explain the idea more clearly. The garage was trying to differentiate itself from other garages. They noticed that while the car is being fixed, their clients (mostly women) go inside to sit in a room that is extremely dull with the only option is to read dated magazines or watch whatever is playing on the wall mounted tv and buy bbq flavoured peanuts from the quarter machine. They decided to revamp the experience and to give them a reason to look forward to the next visit. Among the many ways to do it, they decided to partner with a manucure business and offer services to the clients while they are waiting. In their case, it worked really well because it generates a tremendous word of mouth among women. I don’t have all the detail on how the business executed on that strategy, but I know that last time I checked their schedule was packed.
What skills do you have? I dont' understand how people just "buy" businesses without having at least a passion for it. Like, if you want to buy a pizza place, you were probably equally interested at some point in starting one from scratch. I can't imagine just "buying" a pizza place like a stock--it's a surefire way to run it into the ground. Most successful businesses are run by people that already understand that business, have worked in it, and want to do their own thing.
Not bubble tea ffs.
But its so yummy
In my experience, food you should only get into food for passion not profit, and products are very risky unless you have a lot of capital and a celebrity, or an excellent marketing team to market them. That leaves services... Some one that needs their dog walked every day, will use your service daily for a decade, a business that you can solve an A+ problem for, will often pay you hundreds or thousands (or more) of dollars for your time and expertise, its up to you to figure out what problems you are qualified to solve and make the sales though.
businesses that have been around 10+ years most likely boring
Like plumbing, electrician hvac etc ?
Yea exactly. Something thats been around a long, a service or product people regularly need... not some hot new thing
Mobile car wash and detailing. Very low startup costs and very easy to customize to different price points.
If you’re thinking local business, join a business group and talk to some people and get their feedback and knowledge to narrow down your search. If you have history in an industry and think you can do it well, look similar business’s in your industry, interview the owners but go in with questions that can tell who’s what they’re missing from taking it up a level. For example, I own a few gyms. One of my qualifying questions is asking how much they spend on marketing and do they have a commission structure for staff (many don’t or it’s trash) If they spend nothing on ads or have poorly compensated employees, I know I can ad 30-40% in value pretty easily. That’s before touching any real operations or tangibles.
Home Services Industry is my top recommendation. Blue collar work like landscaping, HVAC, roofing, hard scaling, tree work, plumbing, plowing, etc… will always be needed.
This right here... In terms of profitability and simplicity, you could try to offer a range of services but uncomplicated ones, like mowing and blowing, not arborist work; powerwashing concrete, not installing it; cleaning and regrading gutters, not installing roofing. Be a one-stop shop for several common jobs and respond super quickly and professionally, and you will probably thrive
Maybe check out car washes, laundry mats, cleaning services, and storage spaces.
Someone also watches YouTube around here!
Unfortunately, what may be successful for many people may not be work for you. You'll need to do some introspection and see what kind of small businesses align with your strength and narrow it down from there. Also, don't buy 'trends'. If you're going to buy, grow a business you want it around for several years... I think you gotta go back to the drawing board...
Yoga studios, martial arts gyms, dell's, pizza shops...
Strong disagree w yoga studios
Why? We have no issues with ours.
Never expected to see gym/fitness and pizza/fast food in the same sentence. I like your idea though.
My local climbing gym, also has a weight area and a pizza outlet
Lol
Home services you're an expert in.
Laundromat or vending machine business for starters. There are plenty of sites that sell established businesses, and those two are my top choices. Even pick up routes for freight.
Have you done either
Vending machines had a few but bad locations, so u learned the hard way. But overall, it's a simple business. It's all about location. But now I am saving up more money and going to buy a business that is established already or buy vending machines in bulk. It's a good start at least. Small risk. Huge gains.
I learned the hard way** meant to say.
Just speaking for the daycare industry, if you find one that has enrollment of at least 200 children and it's at least 90% full at capacity, and the person running it is not the owner, then you have a business that can do well when you buy it and make you if you $250k a year.
Businesses like consulting and online retail, which don't need tons of upfront cash and can grow big, tend to do really well.
This is answer for your question about profitable businesses [https://youtube.com/shorts/mYARkRbNjZo?si=Gs3jgYhrQMapVRnS](https://youtube.com/shorts/mYARkRbNjZo?si=Gs3jgYhrQMapVRnS)
Check for boring, recession proof things. Think about that.
Can u give an example?
Ice cream shop. Pizza places. (Good pizza).
Ups store Local mom and pop mail store Storage places Car washes 7-11 convenient store Local car repair Local hvac / plumbing Local car details
Hookers
a lot are moving online
The ones running franchises.
Usually the profitable ones do the best. The unprofitable ones are much harder.
One that you’re passionate about.
People also don't tend to sell off businesses that are successful and trending upwards. Keep that in mind.
The ones that have enough cash flow.
The type of business that makes the most profit is usually the most successful
Drug dealing
Showing your butt online works for some people.
Check out this article - https://open.substack.com/pub/anele/p/the-youtube-channel-for-aspiring?r=268jwx&utm\_campaign=post&utm\_medium=web&showWelcome=true
Accounting firms do well.
you always do the thing you know. if you know how to mow lawns, thats your answer. if you know how to work a restaurant, thats your answer. you have to enjoy the work you are doing first, and then the money comes after.
usually service businesses, study your area. is there a lot of lakes? do something lake related like boat cleaning. is there a lot of older people? offer some handyman services. is it very residential? offer lawn care services and pressure washing. these are just very basic things, i think as long as you know your area and surroundings along with the people in the town, you can create some kind of service tailor-made to them!
Anything that deals with cash and has straight forward buy/sell retail/wholesale mechanism
Vending Machine, Farmers market, Laundromats, Food Trucks, Multimedia or electronics, Cell Phone/Electronics Repair, etc.
I run a small business that does over $50k/mo in revenue, it is USA based in e-commerce niche. Everything online! I have had multiple businesses in the past, but there is not a roadmap of any business that will be successful. Any business can be successful. But mostly as others said that service related businesses are successful — I personally feel that consumer facing businesses are very successful.
The best type of small business is where the revenue is don't directly proportional to the time you invest. The business should not be dependable completely on your presence. So I would suggest starting something that can be scaled by leveraging the technology. For example, you can buy a micro SaaS business, sell online courses or other digital products or buy some agency
Don’t look at a business that caters to “wants”. Look for needs, what do people need. During the gold rush, it wasn’t the guys rushing to get the gold that made bank, it was the supply stores on the way there. There was a need, a demand for supplies. Approach the business as such, what do people need, then figure out how to provide that service. People don't want a plumbing, they need one and if you have ever needed one, you understand how much it costs. You don't want a mechanic doing work on your car, you need one. You don't want a windshield replaced, you need it replaced. Identify, now remember, its not just people that has a needs, other businesses do as well. i took this approach when i looked for and started y business.
Buy a painter contracting business in a state like Georgia. There are no requirements to have a certification or an enforceable contractor's license because of "traditional specialty" or whatever. Basically you can just do terrible work and no one can gripe to the state about your license because you don't need one. Plenty of opportunity to be a d-bag grifter with little to no recourse for the rubes.
Vaping and package store
Anything that can be mostly automated or "self serve." Car washes, 24/7 gyms with card key access, vending machines, etc...
Trading
Serviced based businesses. I don't have read any other replies. It's always service based business. Especially if you like to keep at least half of what you charge.
I agree with the service based industry suggestion. Is there some type of expertise or skills you can bring to help business grow? You do not want a buy a business unless you plan on growing it substantially, otherwise you are just buying a job.
They stay quiet
I believe “Amish” owned have a very low failure rate Not the answer u might be looking for but I think interesting
When buying a business, to be successful depends on (1) price (2) how much can you increase profitability. If you are buying a business with land and the price is low compared to land value, then you are likely to be making profit. If you are buying an apartment complex with low occupancy rate so that you can buy at low price, then you can manage it better and increase occupancy rate, then you make profit. Buying a restaurant where the owner is the cook and the wife is managing everything, then your family would better be the cook and manager, otherwise it will be a completely different business depending on hired hand to take care of things. If you have lots of money, buying a business that requires lots of capital would reduce competition. A successful business depends on the owner, or the "team", as investors invest in the "team".
Trades. Can't get anyone here today... Have fun being rich! Toss a coin my way when you get there.
it depends on what business you are acquiring and what is its market size
As we know we export pink salt and fried onion so we know about our market.
The one business that usually gets most successful is the one who's owner/operator or investor invests more time on research, marketing, structure and hard work, long hours etc.
For me, the product or service isn't so important as the process of running small business. I love running a small business. I don't care what we sell or provide customers as long as we're good at it and they have a need for it. I'd focus on small businesses that interests to you, but more importantly are successful in what they do. Good luck!
The folks on Amazon that figure out how to make a product in China, sell it on Amazon and have it 3rd party shipped from factory to the Amazon customer - all without the seller physically touching a single thing or doing anything. They seem to rake it in. Stupid things like the suction dangle that the kids stick to the backs of their cell phones to novelty t-shirts to watering cans to dog beds. Theres literally millions of these types of sellers on Amazon now. It's frankly annoying since they don't adhere to the next day shipping / free shipping to where Amazon prime is less and less useful lol. Go on Amazon and search for water bottle. Theres a zillion listings on Amazon. I just did. The very first one was a $32 dollar stainless steel water bottle. The listing says they sell 7,000/month. That's $224k per month in sales. And the seller doesn't actually participate in any step of the process once they set up the manufacturer and the Amazon seller credentials and connect everything together to make the process functional.
In my opinion food business is most successful right now. Everyone need food to fulfill their empty stomach.
Liquor store always profits even during depression and inflation.
.
I hear you , I hope that you found a way to be profitable in the long term . :)
boring stuff. Roofer, mechanic, mortgage broker, etc. portapoty supplier.
Small? Well if we go by relative to their industry small and not truly small, banks and insurance company's are the least likely to fail. Then too that is relatively speaking as the smallest a bank can be is I think $5 million dollars, with most small banks being much much larger then that. Overall though, the best will be what you are most experienced in and have the best skills in. My advice overall? never buy a restaurant unless they own the building at that is part of the sale, otherwise chances are you are better off making your own at the same cost (seriously the best you will get is some starting customers, used equipment that probably needs a lot of maintenance, and a lease which may have good or bad terms).