Here’s another thing to consider when you consider sweaty businesses. You have to look at the market forces.
11,000 baby boomers are retiring EVERY DAY!!! There are 12 million baby boomers who own businesses. I don’t know the percentages, but I’d be willing to bet 75% of these business owners are in these “sweaty niches”. Probably 40% of them will just shut down their businesses. Depending on what numbers you use there will be between 210,000 and 360,000 businesses that will try to be sold per year. When the entire M&A market is closer to 32k businesses sold each year. That’s 6-11x larger than what we’re doing right now. The market is ripe, ripe, ripe and only going to get riper.
What that means is we’re entering the golden age for business acquisition. Period. It’s going to be a pure buyers market when a vast majority of businesses will be forced to just shut down because there are too many deals. Imagine BizBuySell for a category in your market that right now has 30 businesses for sale. And then that number balloons to 300-500. What do you think that does for prices? Right now 40% of businesses just close up or go to employees/children. That number could swing to 90%, and we’d still have triple the number of businesses going up for sale than is normal. Do you really understand how MASSIVE a shift this is going to be, and no one is talking about it. That means where before businesses might have sold for 3x. If you’re just going to shut it down anyway, you might as well get 1x so your employees at least can have jobs. That’s what’s going to happen. I can almost guarantee it.
So the first aspect of this shift is that the retirement of the baby boomers is going to crush the M&A market, and it’s going to drop prices like a rock. But here’s something you’ve probably never considered. Look at most of these sweaty markets. Here’s an example from a post in the sweaty startup subreddit.
“So I called California Closets and Inspired closets. Two national chains and the only providers of a service like this in Athens GA. They both had very slow response times and took more than 3 weeks to visit my home to do a walk through and then another 2 weeks to get a quote. Inspired never showed up.”
Go spend a couple of hours checking out reviews on Home Advisor. Here’s what you’ll find.
- Companies don’t answer the phone.
- Companies don’t do what they say they will
- It’s oftentimes way more expensive than they expected
What do you think is going to happen when this vast collection of baby boomer owned businesses just shut down? There might be 200 plumbing companies in a large city, what happens when over the next 15 years 40-60% of them just close their doors? It just means there’s a bigger piece of the pie for the ones left over. And this is the second reason why owning a sweaty business is going to be huge over the next couple of decades.
Here are some articles to read:
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[url]https://urlzs.com/CxjM[/url]
[url]https://urlzs.com/jS1U[/url]
[url]https://urlzs.com/X4Ma[/url]
[url]https://urlzs.com/Hvyx[/url]
[url]https://urlzs.com/efAp[/url]
[url]https://urlzs.com/BFcm[/url]
So get on it, start your platform company. Get your credit in order. Figure out how to come up with $100k cash. And make it happen.
Just some food for thought.