The underground economy is the illegal way to avoid paying payroll taxes and workers compensation insurance.

Of course when and if you get caught, the penalties are quite high.  If you do the bulk of your work yourself and only hire low paid staff that has low payroll expenses, you can compete with the underground economy.

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This article was originally written in 2010 and updated in 2015. The disaster mentioned was part of the crash in the real estate, stock market and general economy in 2008.

The hardest hit industries in these economic times are real estate agents, furniture and accessory stores, clothing stores and fast food restaurants.  The first thing consumers cut out when they are on a tight budget is their expensive coffee drinks and lattes. 

The teenagers, who are a big part of the fast food consumers, have found that they also do not have money because their parents have cut their allowances or stopped them all together.  When there is money for fast food, or the family decides to eat out, they now pick the places with the cheapest prices.  Lower priced establishments get the business and the higher priced pizza places do not.     Read more

I often hear from business buyers that they are looking for any type of good business. That approach is very much like finding a trophy wife and saying any lady will do as long as she is exciting. An exciting woman for one man can be a disaster for another. You really need a good fit for your personality. This is the same in a business.

You are getting married to your business, and spending more time with it than with your wife. I am not mechanically inclined so I would never own an automotive shop. I am however a numbers person so selling a product or service where I can use my accounting and sales background would be a good fit for me.

I had an out of work mechanical engineer type person doing pool retrofitting sales for me as a temporary job until he found a new job with corporate America, making very big bucks. He would figure out how to solve the problems the installation crews came up against and automated the quotation process so the price popped up. He was good at both sales and production. He was not however good at pricing the product so that we made enough profit.

Everyone has their strong and weak points.

Find out what type of work gets you up in the morning. A salesman can take any type of wholesale or service type business and turn it into a moneymaker, regardless of how well the prior owner has done. A trained retailer is good at working with fixed retail locations while anyone not a retailer will die running a retail storefront. Five percent of the owners of most types of business make a very big profit. Thirty percent do very well, while over fifty percent are starving. The issue is not what type of business is a good business to buy but what type of business will be a good business for you to turn around and create with.

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