These businesses will put money in your pocket on day one

In my work with Acquisition Ace, I've talked to hundreds of people looking to buy their first business.

And the number one fear I hear is: “What if I buy a business that drains my savings and takes years to turn a profit?”

Here's the thing...

A lot of whether your business will be profitable on day one comes down to one simple decision you make before you even start looking at deals:

What industry you target.

Pick the wrong industry, and you're setting yourself up for years of headaches and cash flow problems, getting trapped working “in” the business instead of “on” it.

But if you pick the right industry, you can step into a business that sets you free from your 9-5 in almost no time.

If you’re not sure where to start, here are the main categories I recommend (plus the ones to avoid):

The best industries for day-one cashflow

1. Home services

This includes:

• HVAC

• Plumbing

• Landscaping

• Pest control

• Roofing

These businesses solve problems people need fixed, and they will pay top dollar for reliable work.

2. Professional services

This is any white-collar business that sells a non-physical service, like:

• Bookkeeping services

• Business consulting

• Marketing agencies

• Accounting firms

Accounting firms are my favorite. In fact, my main focus right now is on building up a portfolio of as many accounting firms as I can.

I love these types of businesses because they:

1. Offer recurring revenue

2. Are recession resistant

3. Have a barrier to entry (people can’t easily start these companies)

3. Commercial services

Two great examples that my students have acquired:

• Cleaning companies

• Waste management companies

Businesses need these services consistently (and there are often contracts involved) which guarantees stable recurring revenue.

4. B2B services

There are a million different types of B2B (business to business) service providers.

But broadly speaking, focus on services that businesses need on a recurring basis within a specific geographic area. The key is recurring relationships, not one-off projects.

Industries to avoid

If you have specific expertise in these industries, this might not apply to you.

But for my average student, I’d recommend staying away from these:

1. Restaurants

Restaurants have super low margins and are incredibly hard to run successfully.

Stay away unless you have a ton of industry experience.

2. Retail businesses

Particularly retail businesses without recurring customers, like high-end clothing stores.

Unless you have years of experience and a strong network with industry contacts, skip this.

3. Construction

People give me pushback on this because there are plenty of profitable construction businesses out there.

In fact, a good friend of mine runs one!

But he’s been working in the industry for over a decade, has a huge network, and he’s great at what he does. So he’s an exception.

Construction companies come with labor issues, and they usually offer non-recurring revenue.

So for everyone else, steer clear.

Want first dibs on quality deals?

Any time I come across a potential acquisition opportunity that I think my subscribers might be interested in, I send out a broadcast with the details.

To opt in to receive those emails, just fill out this 2-minute survey:

👉 I want to buy (or invest as a silent partner into) a business

Or if you’re selling your business, tell me more about it below. We’ll reach out if we find a good fit.

👉 I want to sell a small business (and I’m actively looking for buyers)

Onward,

— Ben Kelly