When it comes to investing, there are all the usual things people think of, like stocks, bonds, real estate, and so on. But there’s another kind of investment that can pay off far bigger than those, not only financially but also in intangible benefits. We are at a point where that other investment is in a prime position, there for the taking by the right people. So what is this mysterious investment with the potential to supercharge your bank account long term? We’re glad you asked!
Here are Five Fast Facts on the current golden investment opportunity:
- 💨 Boomer Exit - There are currently about 35 million small businesses in this country owned by Baby Boomers, worth a total of about $10 trillion dollars. Here’s the kicker: many of them are looking to sell and retire, so each year tens of thousands of those businesses are listed for sale. For the right match between buyer and business, this is your golden opportunity of an investment!
- 📈 The Field - In the spring of this year, there were over 35,000 businesses for sale with a median asking price of just under $400k but a median revenue of over $700k. Demand has pushed the price up 25% over the last year, and isn’t showing any signs of slowing. That’s great, because a successful business can provide far greater returns than any conventional investment! We’re talking beach house level returns, here.
- 👀 The Trend Is Already Set - Younger folks in the prime income-generating phase of life (like today’s Millennials) may be looking to invest in a business they can grow, and maybe sell someday themselves. Many are already heading in this direction, since last year about 64% of the people buying businesses were Millennials or younger. Quick, jump on the bandwagon before it passes you by!
- 💰 The Benefits - Buying a functional business gives you a lot of foundational elements. A known brand, existing relationships with suppliers and systems, assets and inventory (depending on the business), and most importantly…customers! A bonus is that Boomer sellers will often be very flexible with financing because they want to offload the business while they can still enjoy retirement. 🏖️
- 🏢 The Competition - Private equity investors have been hitting this market hard for a while now. In 2022, about 85% of private equity investments were small businesses, and in May of this year it was reported that private equity firms were looking to sink another $1 trillion into more small business acquisitions. In particular, they’re looking for common threads that can be combined for greater reach or profit, like plumbing or HVAC companies. If it works for the professional investors, then it should work for us, too, at least on a smaller scale, right?
🔥Bottom line: Running a business takes a lot of hard work! And make no mistake, there’s plenty of risk involved, too. But the upside is tremendous if you can make it happen. Buying an existing business gives you a terrific head start, so if the entrepreneurial itch is getting to you and you have the resources, maybe it’s time to scratch it. Your future self may thank you for following this slightly unconventional investment path!
Are you looking for this kind of “investment?”
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