subject: What is A Good Business to Buy? [print this page] What is A Good Business to Buy? What is A Good Business to Buy?
When I took a course on the art of negotiation in 1980, the instructor told us the ideal negotiation position was to control the oxygen of your opponent. That would make anybody very agreeable, at least in the short term. When you own a business the same is true. You want to be selling a product or service that the public (your prospects) have to buy rather then it would be nice to own.
In bad times people stop spending on luxury items like furniture, restaurants, high price clothing, new cars, etc. People do continue to spend on those items that they must have to survive.
Government mandated activities are one big area that falls under this category. When you are required by law to purchase something, it is similar to the government controlling your oxygen supply. Examples might include: Smog shops, tax preparation firms, and fire extinguishers recharge services.
Businesses that have a barrier to entry have limited competition. There are two types of barriers to entry. One is the investment of money required. We will not discuss this area, in this short article. The other is the time required to get qualified or trained to do an activity or profession. The greater the training time, the fewer competitors there are, and the higher the fees earned. Any business that requires a government license fits into this category as well as activities that require high level college degrees.
Lawyers, doctors and CPAs all have advance degrees in education and licenses, which limit the competition considerably. These professionals all charge over $200 per hour. Some as high as $500 per hour. Real estate agents, construction contractors-of all kinds, hair stylists, pesticide/termite extermination and tax preparers all require testing and licenses. They make more money per hour then non-licensed professions.
If you really want to bring in the big bucks become a lawyer-doctor, CPA-lawyer or a CPA-broker, like I am. This last combination is not as good as the first two but my mother didn't push me hard enough to go to law school.
Willard Michlin is a CPA and offers assistance in the key areas involved
in the buying of a business: Due Diligence and Business Valuation.
He is an experienced, honest and trustworthy consultant. He has published many
articles and is in demand as a public speaker in the Southern California business
community. You can write to Willard at info@evaluateabusiness.com
and he will always answer your questions. He can also be contacted at his
Ventura County, California office by calling 800-864-0420.
See other articles and information about his services at: www.BusinessBuyingServices.com
