By Ryan Cohen
I recently wrote about so-called "boring businesses”—like pharmacies, pest control, and dry cleaners—that offer entrepreneurs stable and promising opportunities.
More and more, entrepreneurs are realising that these traditional "meat and potato" businesses present real money-making potential.
One of the many strengths of South Africans is our inherent entrepreneurial spirit, often born out of necessity.
We are natural problem-solvers, adept at making the most of what we have, which makes these solid, reliable business ventures all the more appealing.
These businesses are often highly profitable and because they have been managed by seasoned professionals they have stable foundations with established operations, making it easier to forecast future performance.
I’ve read that on average buying an existing business can cost up to 40% less than starting one.
Think about it - a start-up has upfront expenses like setup, marketing, and building infrastructure from the ground up.
Buying an established business can save both time and money, offering quicker paths to profitability.
But that’s not the only benefit.
An entrepreneur who has poured their heart and soul into their business wants it to succeed long after they sell shop and are therefore more likely to offer mentorship to the new owner.
This brings immense value to the transition process, as the incoming owner benefits from the founder's deep operational knowledge, allowing them to focus on scaling the business rather than fixing foundational issues.
And scale they can. With a trading income history, it is far easier for established businesses to apply for the working capital or funding they need to grow the business.
New owners can see the long-term benefit of accessing funds that owners wanting to sell may not want to take on.
Whether it be for a new marketing campaign, upgrading the interior of a shop or its technology, or a pharmacy or pet store wanting to bring in more stock. The opportunity is there.
Another benefit is the loyal customer base. It provides a strong ground for recurring revenue, reducing the financial risks typically associated with starting from scratch.
Having access to established customers also offers valuable insights into product preferences and service expectations, allowing the new owner to refine offerings and strategies based on real-world feedback.
Boring businesses also allow entrepreneurs to stay in tune with current market demands and offer vital services, all while avoiding the high risks associated with more volatile, trend-driven ventures.
In a challenging economic environment where people are holding onto their cars longer and forgoing motor plans, businesses that provide essential, everyday services—like auto repairs—are perfectly positioned.
These business models that have stood the test of time can’t be all that bad. So, the next time you’re thinking about starting a business, consider looking beyond the shiny, new industries and take a closer look at the tried and true.
BUSINESS REPORT