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Flipping Businesses like Flipping Houses

Starting from scratch isn’t always a wise business or investment approach. You may have noticed that many successful entrepreneurs jumped on other people’s ideas, concepts, or even businesses because it’s safer to upscale, grow and sustain than to start from ground zero. I started my business from ground zero and my start-ups are growing well – a fantastic idea but now I am more than open to flipping businesses too. There is a reason real estate developers are jumping on the flipping bandwagon. It is similar to flipping businesses. In practical terms, it is much easier to sell an existing commodity that already has a market than to sell a new one that has even met the functional requirement of uniqueness, scalability, feasibility, and viability.

Buy Existing Businesses

Think of a business to buy. Look out for opportunities in the market to buy that business or a similar one. There are tons of businesses for sale, so go business shopping. Some locals are selling a business as part of their overseas relocation plan; it could be a bakery, a school, an eatery, a wine shop, or a distribution outlet. Look for businesses in your area of interest and go for them.

Buying businesses is not a new tradition. Investors buy existing or moribund banks, refineries, fuel service stations, factories, companies, football clubs, and even brands and franchises because buying existing businesses is largely a more secure way of investing and the need for participants in the local industries to take this flipping thing seriously as against the rush to set up something new all by themselves cannot be over-emphasized as we know only one of a hundred new businesses survive the first five years. That’s not a decent business mortality rate!

Buying businesses comes at a cost but the immediate benefit is that you don’t have to invest as much time (usually in years) and money to gain customer’s trust as chances are that they’ve already trusted and accepted the brand to have kept up with it for the duration of its existence. Like with your regular shopping experience, while business shopping, do a lot of window-shopping the business too before you finally give a nod.

However, there are cases where the business has gone moribund or even collapsed due to poor management or other issues. For instance, a key worker whose experience and creativity were essentially the backbone of the survival of the business had been fired or the owner or key person involved is now incapacitated and can no longer perform at great levels or the owners are now disinterested in that line of business not because it’s become unprofitable but because they have simply changed interest or perhaps the enterprise have lost loyal customers due to bad operational policies or bankruptcy but the customers or clients are still willing to deal once those issues are fixed.

After careful well thought-out research on the viability and sustainability of the business including studying the assets, liabilities as well as debts, if you or your investment adviser finds it worthy, go for it.

You can also think out of the box. Think deeply, there are some brands or businesses you were familiar with while growing up or even engaged with that seem to have disappeared as time passed, you wonder what happened to those brands and businesses that you previously adored. There may be something in there for you. Chances are that you might be able to pull some strings, put them back in the market, and create wealth for yourself and others. 

The Magic Fingers and the Midas Touch

After securing that existing/moribund business from the previous owner(s) or perhaps a successful joint venture with the owner(s), the next line of action is to flip and scale up. Some businesses went through a downward spiral because there was a lack of creativity, innovation, etc and when such businesses fall into your blessed hands, you need to introduce the missing component(s) and watch it bounce back and start generating tons of cash in a rather shorter time than a fresh start-up. To flip and scale up in this sense is to rebrand, inject new ideas, resources, and strategies, and improve the brand or business as per productivity. Elon Musk bought Twitter and improved it, generating more revenue using creative monetization strategies in the process. NIPCO is also using the flipping joint venture investment strategy in Nigeria’s oil downstream sector to achieve a massive spread and huge market share. The examples are endless, so get up and start flipping.

the authorOsaz Enobakhare
Osaz Enobakhare is a Real Estate developer, heavily vested in developing green residential and commercial properties in Africa and elsewhere through his company, Heavens Group. He is also involved in Fliipa, a proptech start-up utilizing a special funding model to flip moribund properties in choice locations, generating significant revenue for investors. He is open to giving professional advice and entering partnerships in executing real estate deals across the world. Whatsapp+2347001113333/

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