December 1, 2022

Avoid Buying These Four Businesses! Bad Biz = No Cashflow

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Avoid Buying These Four Businesses! Bad Biz = No Cashflow

Unconventional Acquisitions

December 1, 2022

If you’ve been kicking it with us here for a while, you know that we steer clear of sexy-looking businesses. 

We respectfully decline all invitations to sit at the table with any fancy tech start-ups or hardcore bitcoiners. As hot and steamy as these industries look, you’ll make less money than if you invested in an infinitely less attractive business. 

What are the Best Businesses to Buy?

Watch Codie Talking on The 5 Best Businesses She Recommends Buying in Our Biz Buying Masterclass

This is why we shift our gazes to the likes of businesses that look boring on the outside but have the potential to make us (and you) the big bucks. 

It’s what PE has been trying to hide from us down on Wall Street… ask Warren Buffett and he’ll tell you the same thing.

Buuuuut, not all boring businesses are made equal. There are some businesses we don’t recommend you waste your time on, even if they make you wanna snooze. 

Hot tip… we like to use a little something called the Blue Ocean Strategy to find not-so-exciting yet profitable businesses to sink our cash into.

A blue ocean is a segment in the market where there’s little to no competition. This means little pricing pressure and higher profits for you. 

Pretty straightforward.

The 4 Businesses You Should Avoid Buying

Not sure what businesses to buy and what ones to swipe left on? Here’s a list of businesses we don’t recommend adding to your portfolio.

1. Restaurants

What exists on every corner of every block in every city? 

Somewhere to eat.

What does this mean for you? Hella competition that you have to outperform and fight off. And we’re really uninterested in entering a ‘who makes a better vegan meatball sub’ competition. 

This high competition explains restaurants’ 60% failure rate in their first year. This number jumps to 80% within the first 5 years.

And that’s just the failure rate… never mind the onslaught of other reasons why this industry is serving us some serious red flags when it comes to being a low-key passive income stream. 

Not only do you have to worry about the latest Paleo gluten-free sandwich shop popping up across the street, but you also have to be concerned about Yelp reviews, staffing issues, and food shortages.

Oh, and the looming recession… ‘cause grabbing a bite is usually the first thing to go when the economy’s in a tailspin. 

It’s a no for us, bro.

Read: How to Choose Your Most Profitable Business Model

2. Retail Boutiques

We’re entering a ‘retail apocalypse’… which tells you all you need to know about investing in anything retail. 

Who’s responsible for Target’s version of Dawn of the Dead? 

One word: Amazon.

The world of e-commerce has completely changed consumer behavior and ultimately shifted how we shop.

Why would you get off your couch when you can Prime *literally* whatever you need to your doorstep? Nothing turns on the everyday consumer quite like convenience and easy living. 

Similar to the restaurant industry, this market sector is high-risk with some heavy competition (truthfully, there’s no competing with Amazon…). And it’s greatly affected by economic conditions, so you can expect sales to tank when the economy is in the dumps. 

Please pass on this one.

3. Amazon Selling

If you can’t beat ‘em, you might as well join ‘em… Right? 


Sure, throwing up products on your Amazon storefront may seem like a good idea in theory… there’s a ton of site traffic, and with Amazon FBA (fulfilled by Amazon), you don’t even have to worry about inventory. 

Buuuuut, it’s not all roses.

You’re dealing with a highly saturated market, with tens… sometimes hundreds of sellers for one product. You also have to consider the Buy Box score, which is Amazon’s way of deciding if your product is the best fit for the consumer. 

They’re continually changing what determines a winning score, so you’re also trying to crack the elusive Buy Box code.

Then you pay the hefty selling fees for each sale, especially if you opt-in to FBA. So, you have to make sure your margins are high enough to make any profit.  

There’s a reason Jeff Bezos is the richest dude in the world. The same reason we don’t advise you to add this type of biz to your portfolio.

4. Dropshipping

Yet another TikTok get-rich-quick scheme? Maybe. 

Dropshipping is an order fulfillment method where an online retailer or business doesn’t keep any inventory in stock. Instead, the seller purchases it from a third party. 

This is comparable to Amazon FBA, where you don’t have to worry about having any product on hand as it’s all handled by the supplier. 

That’s great, but with three parties involved, things can get real complicated quickly. 

All issues with the supplier are put on you, the middleman. This means customer complaints or problems in the supply chain are your responsibility, even though most are out of your control. 

And the cherry on top of an already not-so-great cake? 

There are minimal profits to be made. Your income is limited because you need to buy products at a wholesale discounted rate for bulk orders. It’s on a per-customer-demand basis. 

Add in high shipping costs, and we’re running as far and fast as we can.

Yours Unconventionally,

Codie & Ryan

Co-founders – Unconventional Acquisitions

If you want to learn more about how to find and buy businesses, check out these articles👇

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