You know the drill. As a businessman, it's all too easy to become caught up in the pursuit of the next big thing, such as being the next TikTok or Tesla. But what if I told you that building wealth can also involve pursuing the most mundane options? Allow me to explain. Because everyone is focused on new startups, there is a big opportunity to invest in understated but effective main street firms and support their growth, why? Let's get into it!
You know the drill. As a businessman, it's all too easy to become caught up in the pursuit of the next big thing, such as being the next TikTok or Tesla. But what if I told you that building wealth can also involve pursuing the most mundane options? Allow me to explain. Because everyone is focused on new startups, there is a big opportunity to invest in understated but effective main street firms and support their growth, why? Let's get into it!
These businesses don't try to "go big." Instead, they focus on doing well with what their customers want, what the market gives them, and what they can control. This makes them resilient to the changing tides of the economy as a whole. They also know what they don't know, like how they don't like new technology or how their branding is so old that it's funny. Even though there are gaps, they still make customers happy and make money. These businesses have seen too many "sure things" come and go to get excited about something that hasn't been tried before. Instead, they choose to keep their attention on the everyday tasks that keep customers coming back.
Every business has a shelf life. This is because competitive advantages fade, economies change in unexpected ways, and life happens. For example, there is a better chance that Shakespeare will still be read in a thousand years than the latest poetry book will. This is true for some companies. The longer they've been around and the more storms they've been through, the more likely it is that they'll keep going.
This long life also has effects on the community that help everyone. In addition to providing stable jobs, boring businesses are deeply rooted in their communities. For decades, they have given money to local charities and led the way in the area.
The last thing that makes boring businesses interesting is the way they are run. CEOs who aren't interesting won't be on the cover of Inc. or going on a speaking tour. They're just not interested in the show. It's not that they're not interesting or don't have ideas worth sharing. Most of the time, their leaders are thoughtful, responsible, disciplined, and low-ego. This is probably because that's what it takes to survive and thrive for decades.
Boring businesses have a long history that can be used as a fact-based, data-rich resource.
So, even though people spend a lot of time talking about the next best thing industries, make no doubt that boring businesses are just as admirable—and sometimes even worth investing in.
What's the first step? Look for family-owned businesses that meet a specific set of investing criteria. Then, do the following:
In order to boost profits and ready the company for a quick sale, the traditional private equity buyer focuses primarily on reducing expenses. However, this strategy always puts the new owners at odds with the original staff and company founders. This aggressive stance creates a situation where both parties lose, which can't last.
Instead, you should approach each investment with the goal of never selling, which necessitates a mutually beneficial outcome and a longer time horizon. Collaborate with the vendors to get information on the areas' and businesses' standings and the prospects' and workers' hopes and fears. Work together to come up with ideas that will help the business grow in the long run while also making everyone's lives better, especially the workers. This emphasis on sustainability and reciprocal benefits leaves everyone feeling happy. Both the company's original founders and current workers understand that the startup's primary purpose is to facilitate the existing company's expansion. Their demeanor changes for the better, and some of them even offer to help in the rollout of the new company's strategies.
Make a list of deal-breakers or warning signs that point to potential issues in your company. For example, have zero tolerance for dishonest behavior from your team or the companies in its portfolio. It is not worth not being completely honest because the relationship would surely suffer. The best chances of success belong to those who exhibit openness, honesty, and friendliness. These are frequently the businesses that emphasize the value of perseverance.
Relatable: What should you look for when buying a business?
Like other investments, you want to make long-term investments. Why? The best potential for value growth for your money is through long-term investing. Likewise when buying a company, the goal should be owning the company forever. Make choices that will long-term benefit the business. A good rule of thumb? Ask yourself this. "What can you invest in today that will help us in 10 years?"
If you are considering purchasing and renovating a business, you should spend your time looking for an exceptionally unusual collection of variables in which ideologies, business situations, and timing all align ideally. Or as near as possible. Because you are in it for the long haul, you must read between the lines to determine if this is the best case scenario for you and your funds.
Boring businesses don't always produce boring outcomes.
It's vital to stand back and consider those doing things differently — and doing them well — in a world where everyone is so concerned with getting the next best thing. Working with wonderful people, not worrying about landing that first customer, and having a blast while doing it are all opportunities presented by helping boring businesses thrive. It's not necessary to see "boring" negatively. Instead, the business once more demonstrates the importance of looking in places where nobody else is to forge a genuine competitive advantage in terms of potential and earnings.
To make that goal a reality, talk to an advisor Vincere Wealth to get that ball rolling! Speak with an advisor here.
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