Why Boring Businesses Are Skyrocketing— And How You Can Benefit
Money Rehab with Nicole Lapin
Key Insights
Why are boring businesses like plumbing and cleaning becoming popular investments?
These businesses are stable and generate consistent revenue, making them attractive to investors seeking reliable returns. Private equity firms have bought over 800 such companies since 2022, highlighting their profitability.
How can an average person benefit from investing in boring businesses?
Individuals with entrepreneurial aspirations can buy local businesses like dry cleaners or nail salons, often without needing an MBA. These businesses can be acquired for less than a fancy house and provide steady income.
What are some financing options for buying a boring business?
Options include seller financing, Small Business Administration loans, and traditional business acquisition loans. Mixing these methods can help manage the financial burden.
Why are private equity firms focusing on boring businesses like plumbing?
These firms need leaders to run the businesses they acquire. Alpine Investors' CEO-in-training program sends graduates to manage plumbing companies, showing the practical value of such businesses.
What tools are available for finding and evaluating boring businesses for sale?
National services like Biz Buy Sell or Biz Scout function as Zillow for businesses, allowing potential buyers to browse listings, check pricing, and learn about the sector. Business brokers can also assist in finding the right fit.
How quickly can one expect to recoup the investment in a boring business?
In the case of a plumbing business for $850,000 with $404,000 in annual profits, the initial investment could be recouped in about two years, assuming historical performance continues.
What are some alternative ways to invest like private equity firms without buying a business?
Investors can use ETFs that mimic PE moves, companies like Fundrise for real estate, or invest directly in public PE firms like KKR and Blackstone.
Chapters
- Private equity firms have bought over 800 plumbing, electrical, and HVAC companies since 2022.
- Alpine Investors CEO in Training Program sends graduates to run plumbing companies.
- Boring businesses are often local mom-and-pop types with no successor, making them ripe for acquisition.
Shownotes Transcript
