Searching for mature, profitable little-known kinds of niche businesses for sale; the kinds of SMB that rarely appear on the want-lists of businesses sought by buyers.
- Off the beaten path, in the USA or Canada, is where we want to be.
- Company must prove strong competitive advantages.
- No franchises.
- No restaurants.
- Few, if any, local direct competition.
Here’s an example:
One of my clients bought a forty-year old manufacturer of patented low-tech industrial products. The elderly man who was selling the company invented some of the products. These products do not become obsolete. All of the company’s revenue came from repeat business and word-of-mouth among customers. He hadn’t made a sales call in years. He had no catalog or brochure. No marketing effort whatsoever. We noticed that the company’s products were only sold in the U.S. We asked if there was demand for them abroad. The owner said there was but he never got around to looking into it because he didn’t want to put up with all the paperwork necessary to export and do business with foreigners.
Here’s what my client, John, did. Within ninety days of buying the company, he launched a national marketing blitz. He established dealers across the country. (Before then, the company sold direct to customers.) He furnished dealers with four-color marketing materials. He sent them a video showing how to install and service the products. Within five months, he was selling internationally. Within six months, the company’s profits had doubled, from $20,000 per month to $40,000 per month; that’s nearly $500,000 per year! Around that time, he got his first offer to buy his business from a large company that had been watching this sleepy little firm take off like a rocket ship.
John was an experienced businessman. He knew how to run and grow companies. But he was not an expert in buying them. And, he recognized that even if he knew how to buy, he first had to find a winner.
We want to do it again!