Finding, Fixing and Flipping a small business is much easier than real estate for a variety of reasons. In this brief article, I’m going to touch on a few of them.

Very Quickly, here are 5 advantages in dealing with businesses instead of real estate:

Little Competition: You are not competing with every Tom, Dick and Harry who watches a late night TV Infomercial guaranteeing instant overnight success in real estate.

Seller Financing: Statistically, 84% of owners will carry back some or all of the financing, so locating money for the deal is right there at your fingertips.

Immediate Cash Flow: If you pick the right deal you get cash flow the very next day.

Fast Turn-Around: Most businesses that are currently operating at break-even, or at a loss can be made profitable within in 60 to 90 days.

You Control The Outcome: In a business, you control about 85% of what happens. Your results are not dictated by government housing regulations, bank lending rates, or any other “boot-on-the-neck” regulations from the government, (for most businesses).

A business is totally under Your control. You pull the strings and You control it.

You also get cash flow, tax write-offs, incentives, and a whole host of other immediate benefits.

You can’t say that about real estate market. Not in Land, Not in Houses, and not in Commercial Real Estate either.

No other investment in the world gives you so much power and control over the outcome.

In the business of business flipping, you’re the master of your destiny and the opportunities are everywhere.

If you look back in history, as far back as you can or want to go, and follow it all the way up to present day, you will discover that the richest, and most powerful people in the world all share one thing in common – they all made, or are currently making their money in business.

J.D. Rockefeller, Andrew Carnegie, Henry Ford, J.P. Morgan in the past, and currently, Warren Buffett, Bill Gates and Michael Dell and Jeff Bezos.

They didn’t make it in real estate, they didn’t make it in a high paying job, nor did they make it in stocks or commodities. They made it in Business.

The Biggest Problem When It Comes To Investing In Businesses Is This:

“How-To” Information is hard to come by. It’s somewhat of a closely guarded secret because those doing it are making a lot money doing it, and they don’t want to train the competition.

The Market Is HUGE: According to the U.S. Census Bureau … There are approximately 2,000,000 businesses in America

If you take any 100 businesses put up for sale, you will find:

  • 4 of them will be sold quickly at full price or even higher.
  • 16 of them will sell at a discount of 30% to 50%.
  • 80 of them are not sellable and will end up closing their doors.

So, all things being equal, 16% of 2,000,000 business presents a HUGE opportunity with little or no competition. (2 million x .16 = 320,000)

AND…Get This:

According to several studies, roughly 33.5% of all US companies are owned by people over 55 years old, and 76% of them are expected to sell, retire, or close within the next 10 – 15 years.

When you get right down to it, the numbers are staggering, the opportunities are abundant and the competition is almost non-existent.

In a recent study performed by BizBuySell.com, (the world’s largest business for sale website)

97% of business owners 65 and over plan on selling within the next 5 years. 57% of them plan on selling within 6 months, and 81% of them plan on selling within the next 12 months.

I was just told by the owner of the largest business brokerage franchise in the world, that over the next 10 years, there will be $12 Trillion dollars of business equity changing hands. That is Trillion with a T.

With the resurgence of the economy and slashing of “boot-on-the-neck” anti-business regulation, the aging of the business owners, and the lack of entrepreneurial education taught in the school system, opportunities are all over the place.

All you need is a methodical process to identify the obvious and a checklist to Identify Deficiencies, Uncover Hidden Assets, Capitalize on Opportunities, and turn a tactically operated business into a strategical operation (the 4% mentioned earlier in this article) and “Flip” it to a strategic buyer.