Does it makes sense to buy business in these COVID-19 crises times?
As I was picking up my daily e-mails, the above question was staring me in the face. I thought, “Wow” this is a great question?
What I have been noticing is the way consumer business is changing. A lot of those changes are permanent and not just in place because of the virus. Let’s look at what major trends are occurring.
- Major banks are closing a lot of branches.
- For the short run: since many businesses are temporarily closed, they do not need branches to do banking at. Since employees are staying home, they are also not out shopping and visiting bank branches.
- For the long run: With the new app for depositing directly to your cell phone, you can bank from home. Payments can be made online for regular monthly expenses. Kids under 30 have never written a check. They use credit cards for everything.
- Major Department stores were closing before the COVID-19, retail shut down and this trend has accelerated because of the retail shut down. The malls being closed by the President has stopped all walk-in traffic from mall shoppers.
- Major sit-down restaurant chains are closing such as the Cheesecake Factory. This has been accelerated the Presidential order, but these chains see a long-term negative trend that help them decide to call it quits.
- Restaurants doing take out are pushing the sale of other related items. Micro-breweries are carrying bread. Bread sales and other hard to get food items are being carried by businesses that use these ingredients in their normal food sales, but since some items like yeast, are hard to find it is a way of servicing your customers.
- I anticipate a lot of vacant retail space showing up when the dust clears. Especially department store and supermarket size space. I do not see where the industrial space will be hard hit once everyone goes back to work. Boy I am sure happy that I own multi-family residential building. We have a housing shortage that will not go away for a long time. Maybe we can convert Malls into apartment houses. We will see shopping malls being torn down in the future to make room for Multifamily units. The value is in the land not the building. Malls have so much parking which is needed for residential housing.
- I see retail restaurants having a very hard time for years. People will have to keep 6 feet away from the neighboring tables. To eat, people will have to remove their masks which will expose them to the other people in their party they are sitting next to.
- Construction will boom because of the rebuilding of the infrastructure. This will generate millions of high paying construction jobs. People looking to buy a business can’t go wrong it they can figure out a niche service or product, in this area.
- Any product or service needed for the aging population. Senior day care, medical services, senior living are all going to get bigger and bigger. You must be well educated in these areas. It is not for the uneducated as to legal requirements.
- Home services have all been stable businesses and they should continue to be so. Such businesses as window treatments, carpet cleaning, gardeners, termite treatment, plumbing repair, roofers, landscapers, heating/air conditioning.
- Internet marketing is probably got a long-term future. This is because you must be able to sell your product and the social media is here to stay. Online marketing is destroying the whole brick and mortar big box department store industry.
- The auto industry will have some big losers because of self-driven hybrid and electric cars. Fewer accidents will cut down on Auto Body Shops. Lower gas consumption will put gas stations out of business. Economy car washes will kill full car washes and Shell car washes which will not be able to compete. New and used car sales will continue to be a profitable activity.
- Organic Food, Grain Free, no added sugar products, Paleo and Keto are the healthy way of the future. This is what my bakery is converting to and what will get me off all my doctor pills. Go healthy with food production and food product sales.
- Go Green will be a winner going forward. Anything that is pro environmental, lowers our dependence on fossil fuels will create good prospects.
- One of my favorites is farm raised fish. The downside up until now is the insane idea to feed fish grain. The forward thinkers are feeding them algae. This will give the fish the needed Omega 3 that everyone needs and wants. The ocean is polluted, and we are going to have survive without it.
When looking for a business think what will be around in 20 years instead of what has been around for 100 years. Good luck and happy hunting.
