The Attractiveness of “Boring” Companies for Searchers

Entrepreneurship through acquisition is a tried and true pathway for aspiring entrepreneurs to find, acquire, operate, and hopefully exit a business. Search funds are increasingly becoming a viable career path, both domestically and abroad (as far as India). 

There are hundreds of industries, markets, or verticals searchers look to for potential acquisitions. The most common of these are IT Services, Healthcare, general services, and software. But, no one is talking about the more “boring” industries, which are in fact the backbone of our modern economy.

In a recent article from Entrepreneur, these so-called “boring” industries are put at the forefront of the discussion in relation to search funds. “Waste management, HVAC, property maintenance, industrial cleaning, and commercial laundry services are just a few examples of these unsung heroes”. The attractiveness of these industries comes from a few key points.

First, these companies will likely always have demand for their services. People will always need their structures heated and cooled and plumbed, people will always need their waste disposed of, and their laundry cleaned. Second, they rely on recurring revenue business models, including subscription plans, even in times of economic downturn. Third, these companies have high barriers to entry. Often, they require a plethora of advanced permits and licenses that stifle competition from entering the market. Finally, a key aspect of any successful search fund is acquiring a business that has a stronghold in a geographic area, which these “boring” companies tend to have – if you acquire a local HVAC or commercial laundry business, the chances are you’ll inherit some long-standing relationships with local clients, a boon for future growth. 

Additionally, "boring" businesses often have untapped potential for growth and modernization, as many are run by retiring owners who haven’t fully leveraged digital marketing, automation, or scalable systems. A searcher with a fresh perspective can streamline operations, implement new technology, and expand market reach, significantly increasing the company's value. Unlike highly competitive industries, these businesses often face less disruption from rapid technological changes, making them a more sustainable, long-term investment. Ultimately, "boring" companies offer searchers a unique combination of stability, profitability, and upside potential, making them an attractive target for acquisition. 

So, if you’re a potential searcher, don’t forget about the potential upsides to a “boring” company, despite the fact that they may seem boring compared to an IT Services or software company. They may just be the perfect investment for you.