There are new businesses popping up all the time but whether they make it or not is another story. With the harsh realities and statistics to back it up, a depressing 50 per cent of start-ups don’t make it past their first year in business.
When buying a business, going for one that’s already established can help to minimise risk – especially if you invest in a thriving industry. So here are our top five types of business to buy right now:
1. Online business
There are plenty of options available to the aspiring digital entrepreneur. The evolution of technology and mobile optimisation means that you can now run a business from pretty much anywhere in the world and on multiple devices.
For many of us social media is a part of our everyday routine and for businesses this means that it’s easier than ever to reach a wider audience at no extra cost.
E-commerce is another popular option, as well as a growing global industry, and as more and more people opt to shop from the comfort of their own homes, online marketplaces are thriving.
According to E-consultancy.com and their figures from RetailMeNot and The Centre for Retail Research, UK online sales are predicted to reach 52.25 billion this year (equating to 15.2 per cent of all retail sales in the UK).
2. Coffee shop
It seems that our tea-obsessed nation has been converted to coffee as independent coffee shops become the trendier counterpart to the chain store.
The coffee shop industry has seen 15 years of rapid expansion, proved resilient in the face of the recession and still remains one of the most successful sectors in the UK economy.
The Telegraph reported last year that ‘coffee shops are replacing pubs in Britain’, becoming social venues and alternative workspaces.
Chief executive of Whitbread Andy Harrison states that the ‘coffee shop market has grown at about 5 per cent per annum throughout the recession even in the most economically challenged parts of the UK.’
And this is further emphasised by director of Allegra strategies, Jeffrey Young who believes that ‘there are still thousands and thousands of places in the UK that don’t yet have a decent coffee experience’.
3. Senior care
The ‘number of people aged over 65 is expected to rise from 10.6 million in 2010 to 16.1 million in 2015’ and according to the Financial Times the ‘demand for care homes is already outstripping supply’.
The UK care sector has seen a wave of foreign investment in recent years, and despite the hefty overheads and the controversy surrounding it, investing in the care home industry can still be a lucrative investment.
The main attraction for buyers is the longer leases that are available for care homes? (25-30 years) compared to the more conventional (6-year) lease for other commercial properties, which facilitate a long-term fixed income.
Julian Evans, head of healthcare at property group Knight Frank, says that last year the market was particularly ‘hot’ and that ‘care home investments can be highly profitable, offering annual returns of 10 per cent or more – and the opportunity for capital growth.’
4. Hand car wash
The hand car wash industry has grown considerably in the past ten years. You may have noticed them popping up at abandoned petrol stations, in ex-pub car parks and at your local supermarket.
There’s hardly any space that can’t be easily adapted to allow the setup of a hand car wash, however you must abide by the government regulations. Aside from the rental costs, the main appeal of this business is the low set up cost.
All that’s needed is access to a water supply, the correct equipment (buckets, hose, detergents etc) and some capital for the staffing costs.
Location is integral to the car wash business and the best locations are near to residential and shopping areas. If the customer can leave their car with you and go shopping it disguises their waiting time and adds that all important sense of satisfaction.
The UK dining market is worth over £40 billion according to PwC and restaurants are an ever-popular option for potential buyers (even in turbulent economic times people will still eat out).
Like independent coffee shops, the market is not yet saturated and there is still plenty of space for smaller independent businesses.
The competition can be tough, but there are plenty of options available to restauranteurs who want to stand out from the rest like food trucks, a more diverse menu and delivery options.
Foodie culture, street food trucks and the pop up phenomenon have greatly benefitted this sector. Now an industry in its own right pop-ups are worth 2.1 billion to the UK economy, meaning that there are now more ways to market your restaurant than ever before and making it a great time to get involved.
Melanie Luff is staff writer for BusinessesForSale.com.
Further reading on buying a business