Have you been thinking about a new business in the Triangle? Got some ideas what would be fun or profitable to run? You’re not alone, the Triangle marketplace is hopping, and businesses are being bought and sold like hot cakes. Much like the housing market, there’s a supply problem for quality businesses for sale. There is a huge demand for profitable businesses, but not all businesses types are as great as they sound, even if everyone is after them.
Let’s explore what this Triangle business broker’s opinions are as far as the top five in-demand business categories in the Raleigh – Durham area:
While many business buyers come to me and say “I’ll buy anything EXCEPT” a restaurant, there are nearly just as many people who, admittedly a little quirky, just love the business and can’t imagine anything else. In fact, some stats point to 40% of “Main Street” businesses (under $1M in annual revenues) sold are restaurants. The reason is simple; you don’t need an advanced degree to open a restaurant, and if you’re successful you can make a lot of money and be something of a local celebrity, at least in the neighborhood…
4Self Storage Facilities
You can’t drive anywhere in the Triangle without seeing self-storage facilities every block. The reason is due to the tremendous influx of people moving to our market, and when people are in transition, they store their stuff in units like these. Add to that they are low maintenance, low overhead, enjoy recurring revenue, and semi recession-proof, and you’ve got an in-demand business.
3Home Based Businesses
People love home-based businesses with significant cash flow. Most of these are run online, but some do have significant workforces employed. I recently sold a pet sitting business that employed over 25 mostly full-time employees, and the whole system ran through a website. We had multiple offers, and the seller got above the Most Probable Sales Price (MPSP) due to the “lifestyle” that the business afforded a future owner.
Gyms are highly sought after due to the hands-off nature of the business model: People set up recurring payments to go to a place (that they often don’t go to) in order to use equipment that doesn’t get “used up” very quickly. In brokerage parlance, it’s a high Furniture, Fixture, and Equipment (F, F, & E), low Inventory business. While some gyms and fitness clubs do require lots of people and have lots of additional revenue opportunities like training and nutrition kiosks, the Rapid Fitness model is streamlined and more cost efficient to run.
1Coin Operated Car Washes/Laundromats
As a business broker, I get more attention to a Laundromat listings than any other business opportunity. The reasons are simple; low payroll, low supply, and for the most part they are all cash businesses. Everyone loves cash! While many people think a laundromat is a hands-off business opportunity, the fact of the matter is that they take a lot of attention in cleaning, repairs, and maintenance; plus the cash factor is actually a challenge. Someone’s got to collect all of that change and get it to the bank, and employees normally can’t be trusted with it!
Neal Isaacs, MBA, CBI is a Business Broker and the owner of VR Business Brokers of the Triangle, located in Raleigh, NC. He writes about business and helps business owners discover their exit options.