Profitable Businesses to Buy
The U.S. economy is starting to pick up steam, and the elimination of numerous federal regulations along with the recent passage of tax reform have created a much friendlier business environment. The tax rate for C corporations was lowered from 35% to 21%, a rate reduction of almost half. Pass-through corporations such as sole proprietorships, partnerships, and LLCs received a 20% tax cut as well. So no matter what type of business entity you have, your tax rate should be lower under the new law. A business intermediary can help you with this process.
For those looking to get into business for themselves, 2018 may be the ideal year to do it. If you are an aspiring entrepreneur, you could either start a business from scratch or buy an existing business. If you have the capital to invest, or you are able to obtain financing, purchasing an already established business offers several advantages.
The most important advantage to buying a business is instant profitability. This, however, assumes that you purchase the right business. In this economic climate, an entrepreneur can thrive in most industries if they have the funding, skills, and a strong work ethic. That said there are some industries that are more lucrative than others, and provide a greater opportunity for success.
Here are four business models in industries that have been trending upward in recent years, and look to be strong for several years to come:
Technology: It is no secret that we live in an increasingly digitized society. New technologies are emerging at such a rapid pace; it is nearly impossible for the average consumer or business owner to keep up. This creates a boundless opportunity for tech-savvy individuals. By purchasing a technology business, you can offer standard services such as IT support, cybersecurity, etc. In addition, you can become a consultant for emerging technologies such as virtual reality (VR), artificial intelligence (AI), and 3-D printing.
Self-Storage: Millennials are driving resurgence in an industry that has been around forever: self-storage. This business model may not be as ‘sexy’ as the others on the list, but it provides a steady income. There is a major trend in our society toward minimalism. And although many millennials want to live in smaller houses, they do not necessarily want to part with all their ‘stuff’. This has led a growing number of them to rent storage space on an ongoing basis.
E-Commerce: In the midst of our soaring economy, one industry that is still struggling is retail. The main reason for this is the rise of E-commerce. Driven by the emerging technologies we discussed earlier, online shopping is gaining double-digit market share with each passing year. Of course, Amazon is and will continue to be the major player in this industry. But there is plenty of room for small and medium-sized online stores as well.
Accounting/CPA: As the business climate improves, startups and established entities alike will need to stay tax-compliant. And the recent major overhaul of the tax code provides more good news for accountants. Understanding the changes made, and how to best apply them to improve their tax situation will be a full-time job that will keep accountants busy for years. In many areas of the country, there are several CPA firms available for sale. Much of this availability has been created by Baby Boomer retirements, and this presents a major opportunity for younger accountants who want to capitalize on the favorable business environment.