Biz Idea #50 – Buy a Snow Removal Business in the Mid-Atlantic

by Byron on March 13, 2012

The Problem:

The problem is Recency Bias.  People only remember what they have experienced lately.  If they have experienced pain, they want to get rid of it.

The Business

Estimated Future usually poses a problem, then solves it with the business.  The business idea is a solution to a problem.  Generally, that’s how entrepreneurship and start-ups should operate.

Sometimes, the problem is unknown to the customer.  No one knew they had nothing to do with half their day and they wanted to spend it gawking at their acquaintances online.  Mark Zuckerberg revealed that problem to them.  (I’m mostly kidding.  Love Facebook since ’07).  Start-ups succeed because they solve a problem.

This particular idea – buying a snow removal business in the Mid-Atlantic takes advantage of a problem that some people have.  Recency bias.  This is the phenomenon of thinking that how it has been most recently is how it has always been or how it’s going to be.  Here’s an article from Nate Silver that talks a little about recency bias in a totally unrelated context.

The mid-Atlantic experienced virtually no snow this season.  Therefore, because of the phenomenon of recency bias, some owners will think that their business is worth less than it actually is.  It’s that simple.  In this case, you have the opportunity to take advantage of someone else’s problem instead of solving someone else’s problem.

Doableness

If you have the cash or the access to financing, this is pretty simple.  Look for a business where you can simply change three small things to make it significantly more profitable.  If you couple that with a good purchase price, this could be a very profitable idea.

My Thoughts

If you are buying someone else’s business, you are buying their customers.  Do they have exisiting snow removal contracts for next year and/or will the phone ring?  This is what matters.  Forget equipment and business longevity and who he knew back when.  Who are your customers going to be next year?  That’s what matters, first, last and (virtually) only.

Take advantage of recency bias.

(And please don’t write to me about global warming.  Did you see Europe this winter?  Snow is still going to be a big part of our winter lives.  Even in the Mid-Atlantic.)

 

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