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What Are The Better Businesses To Buy In This Economy?


Today's question: "What are some of the better businesses to buy in this "down" economy?  What types of businesses tend to do better when the economy is down or retracting like the one we are in?"

Below are answers from our panel of professionals:

"Repossession companies ("repo men") and locksmiths are doing well in this troubled economy because consumers are defaulting on auto loans and home mortgages at any extremely high rate.  Because an auto loan is secured by a lien on the vehicle, a lender may repossess the vehicle when the borrower defaults on loan payments.  The lender utilizes the services of repossession business to obtain possession of the vehicle, so that the lender can sell the vehicle in an attempt to cover its losses on the loan.  Similarly, the high rate of home foreclosures and the resulting change in occupancy of the home  is also driving business for locksmiths, who are hired to change the locks after the prior owner has surrendered the property or been evicted by the new owner."

From:  Joe Sandbank, Attorney For Business Buyers, Owners, Brokers

. . . . . .

"Almost every industry is affected but some much worse then others, The ones with the least impact that I have run into are : coin laundry, scrap metal/recycling centers, defense industry, and. gas stations, They are down in volume but it is unlikely they will go lower then the current level even if the economy goes lower."

From: 
Willard Michlin, Due Diligence Consultant

. . . . . .

"It seems that anything that involves repair business is holding its' own-examples are shoe repair, auto repair, etc.  Property management has been good for me since many people are looking to rent rather than buy.  Restaurants that have medium to low cost food as well as markets that are known for lower cost food costs. Liquor license are selling at the lowest costs I have ever seen, because many high end restaurants are walking away and selling their one asset, their liquor license."

From: 
Bob Hughes, Business Broker, Coachella Valley Area

. . . . . .

"What kind of businesses do well during recessionary times? Obviously health care industries would be everyone thinks of as recession proof, but others are businesses that reflect consumers cutting their costs of living. They don't go out to expensive restaurants or ice cream shops but they are still buying from the low cost restaurants. Even though they are cutting costs they are still spending on keeping existing autos going and personal hobbies (they have more free time) - Auto parts and accessories, motorcycle parts and accessories, boating parts and accessories, computer games, sport equipment, etc. People still need insurance on their autos and homes. They are not buying luxury goods and services, but they are spending on improving their education -- private schools, educational books, home study courses, etc.

My advice is to study yourself and your friends. Understand what you and they are still spending money on. Those are the businesses that do well during a recession. You'll be surprised at how many businesses are still doing well.

Last don't overlook businesses that are just breaking even but will flourish when the economy turns. Now is a good time to buy one of those businesses. Interest rates are low and owners are selling at reduced prices."

From:  Ron Hottes, Business Broker, Business Team in Southern California

. . . . . .

This question above was asked by a BizBen Blog reader. A panel of professionals who participate in the BizBen Blog have given their feedback to this question above. If you have a question you would like answers to - please phone me at 866-270-6278 and look for answers in our upcoming "Answers To Viewers Questions" section!

Do you have an answer/opinion/feedback to the question above or would like to comment on some of the feedback to the question from our panel of professionals?

Feel free to comment below in the the Comments section of this blog post.


Categories: Buying A Business



  Helpful Resources To Assist In Selling And Buying California Businesses
Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses

Mark has a broad range of small business purchase & sale experience from analyzing potential acquisition targets to successfully guiding buyers and sellers through the purchase & sale of small businesses. Mark can assist with contracts, negotiations, legal matters, etc. Reach Mark at 949-478-8393.

Ranvir S. Sandhu, Esq. - Legal Services For Buyers And Sellers

I've worked at top Bay Area law firms and have extensive experience with business entity formation, mergers, dissolutions, conversions, employment matters, including experience in reviewing and negotiating transactional documents such as leases and purchase agreements.

Brad Steinberg, Broker - Laundromat Specialists

PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.

Diane Boudreau-Tschetter: Escrow And Bulk Sale Services

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Helen Yoo: Escrow & Bulk Sale Services - Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.

Joe Sandbank, Esq. - Legal Services

I have provided legal counsel to business buyers, sellers and brokers for over 17 years. With prior experience as a business broker and SBA loan officer, Joe brings both a practical and legal approach to all aspects of the business acquisition process.

Janet Carrera - Escrow & Bulk Sale Services - SF Bay Area

Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.


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