I love flipping businesses. $5 figure monthly cash flow, huge equity and 7-8 figure pay days in just 2 or 3 years.
I get asked all the time “Mike, what types of companies do you like to buy and what industry?”
Here are just a few industries to think about. Keep in mind you can buy these companies with none of your own cash; just like you do with real estate 
- Ecommerce (drop ship)
- Trucking
- Construction
- Healthcare
- Senior care, including home care
- Energy in general and green energy in particular
- Bargain/discount retail
- Second-hand/consignment retail
- Non-discretionary retail and services because “people still have to eat, wear clothes, and let off steam”
- Maintenance and repair businesses (“because people are keeping things longer”)
Other sectors to watch included:
- “Service-type businesses such as home improvement, remodeling, etc”
- “Mixed-use buildings”
- “As the housing market improves and home equity grows, the home improvement industry will follow. Home owners will start investing in their properties again”
- “In cities with strong economies, retail, food service, residential real estate. In cities with weak economies only companies with history of strong performance during troubled times will continue to be good investments”
- “Those companies that can provide core services that cost competitively are doing OK. Technology has helped create efficiencies, but you have to know that space to participate”
- “Agriculture”
- “Food-related businesses”
- “Freight/transportation”
- “Mobile applications software”
- “IT, bio science will grow”
- “Auto repair, tire wholesale: people are keeping auto longer, due to uncertain job market”
- “Construction is beginning to come back, but will take a while to recover”
- “Pharmaceuticals, metals, reits” [a company that owns and manages property on behalf of shareholders]
- “Automotive, distribution and technology still remain viable long term”
- “Food processing, [especially] niche in an organic area where you can get larger margins”
- “Multi-family housing because of the relentless foreclosure process. Manufacturing, as labor is beginning to accept lower overall cost”
- “Housing: low interest rate ability of more people to start buying homes with 2 income will bring back the constructions and will put more american back to work for as long as the FED keep the interest rate down it will keep on making more jobs”
- “Precious metals”
- “Service businesses are king with cash flow and low overhead”
- “We find that lower middle-market enterprises in niche industries or markets are highly targeted for acquisition (www.certifiedbb.com)”
- “Seems to be improving demand for businesses that generate >$100k cash flow”
- “Many out of work will buy a franchise unit to provide a source of income”
Sectors to avoid
- Stay away from Medicare-dependent or other government-dependant [businesses]. Recommend private healthcare instead
- Discretionary household expenses are getting hit the hardest, from high-priced hair salons to travel and other expensive forms of entertainment
- ‘Made to order’ dining establishments
- Beware of retail being threatened by big-box competitors
- Golf courses
- Free-standing restaurants are bad investments as their margins are razor thin
- Custom manufacturing such as composites and metals. This sector has been ravaged by the move to China and is badly needed to sustain basic growth for all industries
I hope this list helped get you thinking about companies you could buy. Remember it’s not your cash.
If you want to learn to flip businesses then please check out my site at http://flippingbusinesses.com
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