In this article, youâll find out what the 10 best types of businesses to buy in 2022 are.
In 2021, a record 5.4 million new business applications were filed. But according to the U.S. Bureau of Labor Statistics (BLS), 45% of new businesses fail during the first five years. This doesnât mean that itâs a bad idea to build a startup but shows that it takes a lot to turn a good small business idea into a profitable business.
For individuals who want their own business, but want a higher likelihood of long-term success, buying an existing business is a possible path to entrepreneurship.
Below, we look at 10 of the best types of businesses to buy in 2022.
1. Vacation Rentals
The rise of the sharing economy has made vacation rentals a business opportunity for ordinary individuals. Through an app like Airbnb, you can rent out your primary or secondary residence with few, if any headaches.
When the coronavirus started impacting day-to-day life, vacation rentals seemed like they would bring in much less revenue for hosts for several years. While many people are still traveling less than they were pre-COVID, the rise of remote work has given others the flexibility to work while theyâre on vacation. By purchasing vacation rentals in desirable areas, you may be able to attract a large number of guests who want to spend a few weeks â or months â working/relaxing.
The real estate market is booming, so itâs not cheap to buy a few vacation rentals, but there are ways to buy real estate without putting much money down.
2. Affiliate Marketing Websites
Affiliate marketing is a type of performance-based marketing â companies pay third-party publishers to send customers to their websites. There are different types of affiliate agreements, with many of them only paying publishers for conversions.
The value of an affiliate website is determined by its net monthly profit, which is heavily impacted by rankings in the search engines. An affiliate site that ranks on the first page of Google for several âhigh buyer-intentâ keywords, for example, is likely to be worth a lot of money. If you want to buy an affiliate site, you can expect to pay anywhere from 20-60x the net monthly profit of the online business.
Small affiliate sites can be purchased for a few thousand dollars, which is ideal for a beginner. For a little more money, you may be able to find an affiliate site with top-notch systems in place, making it a business with a semi-passive income that only requires part-time attention. You may need a virtual assistant and content writers, but those can be found fairly easily on Upwork or other freelancer platforms.
3. Digital Marketing Agency
Since the onset of COVID-19, countless companies are trying to build a better online presence. This creates a massive opportunity for digital marketing agencies. Itâs possible to create an agency that offers everything to everyone, but you have a higher chance of success if you niche down.
Letâs say you have two agencies. One only offers content marketing services to SaaS businesses. The other agency, however, provides content marketing, copywriting, web design, social media marketing strategies, social media management, search engine optimization (SEO), and graphic design services to all US companies. Itâs probably going to be easier for the first agency to attract clients.
As with any business, you should do your due diligence before purchasing a digital marketing agency. But hereâs one important thing to consider: does the agency rely heavily on the founderâs brand? If you buy an agency that generates leads because it has a big-name founder, you may struggle to attract the same number of clients after the business is sold to you.
4. Online Courses
Over the last couple of years, schools have created online courses to mitigate the impact of COVID-19 and reach students in different locations. But you donât have to be a university to make money with online courses â people want to learn a lot of things from the comfort of their homes.
You may be wondering: what would a high-quality online course business look like?
Here are a few examples:
- Photography courses
- Writing courses
- Cooking courses
You could potentially buy a website that specializes in a certain type of course â it would be even better if you have the time and expertise to create more courses on related topics.
5. E-Commerce Stores
According to Grand View Research, the global e-commerce market was worth $9.09 trillion and is projected to grow at a compound annual growth rate (CAGR) of 14.7% from 2020 to 2027. Yes, the big players account for a large percentage of this market, but there are plenty of smaller stores that are doing well.
To create a lucrative business in the e-commerce space, you need to create great products that are in high demand â and thatâs not easy. But the good news is you can sell on platforms â including Shopify, eBay, and Amazon â so you donât have to worry as much about reaching your target audience.
6. SaaS Businesses
The SaaS market, like the e-commerce market, is also experiencing rapid growth. The US SaaS sector was worth an estimated $108.4 billion in 2020, and that number is projected to more than double to $225 billion in 2025.
SaaS solutions are often sold through monthly subscriptions. This arrangement is beneficial for both the business owner and the customer. The business owner gets stable and predictable monthly revenue, while the customer can pencil a dollar amount into their monthly budget for the foreseeable future.
In many cases, SaaS business owners turn to venture capitalists for funding. Thatâs sometimes a good way to fuel future growth, but in return, the owner has to give up equity â which could backfire if the value of the company skyrockets in the future. But itâs also possible to get funding for your SaaS business through an online small business funding platform â such as Biz2Credit â without selling equity in the business.
7. Liquor Stores
A liquor store might not be your first idea when youâre thinking about buying a small business, but itâs an industry that sees strong sales through a variety of economic environments.
Manu Rampal owns East Meadow Wine and Spirits, a beer, wine, and liquor store (BWLS) store in New York. He said, âDuring the pandemic, our shop was offering our customers the additional options of both curbside pickup and delivery. This proved to be a great strategy for us, and business quickly and unexpectedly picked up.â This wasnât an anomaly in the industry, as alcohol sales at BWLSs across the United States grew by 20% from March 2020 to September 2020.
A CNN article found that alcohol sales stay strong during hard times. Esther Kwon, an alcohol industry analyst for Standard & Poor’s, said, âI wouldn’t say it’s recession-proof. People will buy less and they will move to different venues, meaning moving to home instead of a bar. But people will continue to drink, regardless.â
Getting back to Rampal: the owner of East Meadow Wine and Spirits recognized an opportunity to expand his business during the pandemic. He was able to quickly get funding from Biz2Credit, allowing him to take his business to the next level.
You might be surprised to see restaurants as one of the best types of businesses to buy in 2022. At the peak of the pandemic, around 110,000 restaurants were temporarily or permanently closed. And according to a 2005 analysis done by Ohio State University researchers, as many as 61% of independently operated restaurants fail within three years of opening their doors.
But hereâs the thing: the huge number of restaurant closures brings opportunities for future small business owners. You may be able to purchase a restaurant that closed during COVID-19 for an attractive purchase price, renovate it, and open it under a new name.
You shouldnât buy a restaurant because of the current conditions, but if youâre one of the many people who has always wanted to own a restaurant, you might want to do it in 2022.
9. Food Trucks
Want to get into the food service industryâ¦ but is a restaurant too big of a jump for you? You might want to buy a food truck.
With the cost of leasing or owning real estate increasing in major cities, a business with little overhead â like a food truck â becomes very attractive. While itâs possible to start your own food truck business, there is fierce competition in many of the big cities. By purchasing an existing food truck with a dedicated customer base, you have a better chance at long-term sustainability.
10. Phone Repair Shops
Here are a few reasons why a phone repair shop is an excellent business idea in 2022:
- In the United States, flagship phones used to cost $200 upfront. They actually cost a lot more than $200, but the extra costs were hidden in monthly fees. But these days, buyers have to spend over $1,000 upfront to get the nicest new phones. Since 56% of Americans canât cover a $1,000 emergency with savings, the higher cost of a new phone is a big deal to many people. This means that if someoneâs phone breaks, there is a higher chance that they are going to try to repair the damage.
- You need a small physical location â if that. You donât need a huge store for phone repairs, enabling you to set up shop in a major city at a low cost. Or you could opt to have a mobile business â no pun intended â and go to your customers.
- According to data.ai, the average user spent 8 hours per day on their phone in 2021, up 30% from 2019 levels. More time on phones is likely to lead to more accidents and technical issues.
You can start your own phone repair shop, but an advantage of buying one is that goodwill is valuable in this industry â people donât want to hand over a $1,000 device to someone without a reputation.
The Bottom Line
Thereâs arguably never been a better time to become a small business owner, as the amount of information on the internet makes it possible to evaluate opportunities in-depth before getting started. The 10 best types of businesses to buy in 2022 were chosen for different reasons, but they all have good long-term upside.
After identifying a possible small business to be purchased, you should do your due diligence. This could involve having a Certified Public Accountant (CPA) review the numbers â they can help your small business beyond tax season.