How to Find The Safest Business to Buy
Updated on December 10, 2026
Transcript
What’s up everyone? It’s Greg Alfering, the Head of Marketing over here at Empire Flippers. Today we have another solo episode of the Opportunity Podcast.
If you’re watching this on our YouTube channel, make sure you go to empireflippers.com/podcast if you want to see me interviewing a bunch of different types of entrepreneurs. We’re doing these solo podcasts because I had very bad luck—basically a bunch of guests rescheduling on me—and then I had an event, so we’re a little bit behind. So I decided, hey, let’s do some shows of Greg just rambling now.
If you’re watching this—or if you’re listening to this normally on a podcast—you don’t know that we have a whole dedicated YouTube channel talking about buying and selling businesses where it is just me rambling. Go to youtube.com/EmpireFlippers, hit the subscribe button, go into the YouTube description, click the link, come and sell and buy a business to help my KPIs, all right?
With that CTA out of the way—that masterful lead on CTA—let’s talk about the meat of this episode, which is the safest type of business to buy.
Now, I see posts—and this is completely unscripted, by the way, so there’s going to be true ADHD Greg rambling here—but I see posts all the time and YouTube videos from gurus, all that kind of stuff, talking about no-fail businesses, recession-proof businesses: “Buy this one. These businesses never fail.”
Now, if you are smart, you know all those are lies. There is no such thing. Every business can fail. There are no truly recession-proof businesses. There are resistant businesses, sure, but no business is completely recession-proof. No business is 100% without risk. None of that exists. That is complete fantasy.
Now, with that said, buying a business, in my view, is way less risky than starting a business. Like, we look at the Bureau of Statistics of Labor—hopefully I didn’t butcher that—but the numbers come out to be: every new business that starts, at least in the United States, 20% of them are going to close their doors within year one. By year five, 50% of them have closed, and by year 10 I think it’s around 65% have closed. By year 15, the original businesses that started 15 years ago, only 25% of them are even still open.
So this tells you quite a lot: while there is that other fake news number of like 99% of entrepreneurs failing, it’s not really true. It’s less than 99%. But in half a decade, you basically have a coin flip of if you’re going to be even around anymore—much less if you’re making any money. Right?
So in my view, buying a business is way less risky than starting a business. But that comes with a lot of asterisks and a lot of caveats, because we’ve got to look at the right business. Some businesses are just as risky as starting one in a lot of cases. Right?
So let’s look at—based on a bit of actual data, like what I just said there—and from my own knowledge of having helped sell over 2,400 businesses where we made 90 millionaires at the moment of exit. And our team has built a buyer network, I think, where it’s over $14 billion now in verified liquidity that people can invest in.
Most of my experience is with digital businesses. I’ve been in the M&A game for almost 10 years. And I’ve seen the other side too, with brick-and-mortars, with bigger companies, with factories. I’m friends with people who work at family offices and private equity. So I’ve seen kind of the gamut of all of this.
So let’s get my unfiltered opinion. If you want the safest, least risky business out there to buy, what would it be?
The first thing—this probably won’t surprise you based on the statistics I just said—we want to look at is age. Age is actually one of the most important parts here if our goal is to try to minimize risk.
There is a rule of thumb a lot of prolific business buyers use, and you probably have heard of it if you’ve been in the M&A content-creator space for a while. And that’s called Lindy’s Law, or the Rule of Lindy.
Lindy’s Law is basically: what has been around for a certain amount of time probably will be around for the exact same certain amount of time into the future. So if you have a business that’s been around for 10 years, there’s a good chance it will be around for 10 more years.
Obviously this is not always true—there are a lot of caveats to that too—but that’s a shorthand for saying something has proven itself to have staying power, which means it most likely can prove itself again to continue to have staying power, barring any industry catastrophe or something like that. Right? You know, black swan events that screw everyone over.
So this is why age is very important. There are a lot of business buyers on our platform that won’t look at buying anything unless it’s at least five years old. And honestly for us, sometimes we’ll accept it, but any business that’s less than three years old—especially if it’s a bigger business—we kind of shy away from even wanting to list that because there’s just not enough data. Most buyers expect at least three years of data. Right?
So the first step to minimizing your risk is really looking at age. Now, if you want the least amount of risk, you should be looking at businesses that are 15 years and older because, like I said, 75% of the competition’s already gone. Right? They are one of the very few that have made it that long.
Now, these types of businesses typically are going to be sold by baby boomers of some sort or someone retiring. Those situations are usually the reason why they’re selling. Maybe they don’t have an heir, like a son or a daughter, to pass it to. Or maybe the son and daughter just don’t want it. Right? So there are a bunch of reasons like that why they might end up selling.
But in terms of the least risky category to buy a business, 15 years and up is pretty good.
Now, if you’re going to buy a digital business like what Empire Flippers sells, that’s much harder to do. I think the oldest business we’ve ever sold on Empire Flippers was 20 years. I might be wrong on that, but we sold a SaaS business that was 20 years old, and that I think is the oldest business we’ve ever sold. I can’t think of any others that have been around for 15 years that we’ve had. I’m sure we’ve had a handful—we’ve sold over 2,000 of them, so I’m sure they exist—but most of the businesses that we sell are going to be three years and up.
You will find a smattering of five years and up, which in the digital space is actually quite a long time because the digital space transforms itself quite often, where one thing is this today and tomorrow is something completely different. Right? I mean, you just look at SEO, how much it’s changed dramatically in the last two years. Right? So five years is a significant amount of time for an online business.
So it’s not as risk-free as the 15-year-old business, but it sure beats a three-year business or a one-year-old business. Right?
So age is the first filter for you, your first safety guard when it comes to buying a less risky business.
So what’s the next thing? Because age, while extremely important, it’s technically just shorthand, right? Because there are tons of caveats in that. You could have a really crappy business that’s been around for 15 years, or a really good business. All we know is it has age.
So what other things should we be looking at as business buyers?
The next thing I like to look at is the actual revenue. Do they have a lot of different customers that are well-diversified?
Now, in an agency kind of setting where you have clients—like you’re fulfilling a service or something like that—what we really want to see is that no client is making up over 40% of their revenue. And ideally, their top clients that do make up that 40% should be spread out quite considerably. Like those clients should be many of them. Right?
I was looking at a friend’s agency. If you look at his top five clients, that brings in hundreds of thousands of dollars of revenue per year, and they only make up about 15% of his revenue if you combine those top clients.
Now that’s very important because if we are looking to buy a business, one of the critical points of failure is if all the revenue is tied up with one big whale client. You buy that business, that whale client had a personal relationship with that seller, and he leaves too because you’re not the seller. Right? That’s a huge risk. We don’t want that critical point of failure. We want well-diversified revenue.
Now, in the e-commerce world, how this might look is having several different products. So if you only have one flagship product, while that’s not inherently bad, it’s not inherently safe either. Right? Because if that product falls out of fashion, if a competitor comes in and makes a better version of that product, all that kind of stuff—right?
So with e-commerce, what we really want to see in that revenue diversity is multiple products in similar lines, with no one product making up over 40% of the revenue. Ideally. Though that’s a little bit trickier with e-commerce.
You want to have a lot of products, a lot of things you can offer your customers, where no one thing is the linchpin of the entire business.
Ideally, the other thing you want to look at—let’s say you were going to buy an affiliate site, for example, which is a little bit of a riskier play these days for sure—you don’t want to buy an affiliate site where all the traffic is just to one page. You want that spread out. Now, traffic and revenue are a lot more interlinked with something like an affiliate site, but in general the same principle holds true.
You want to see that this revenue is well diversified, with no one thing making up 40% of the revenue or more. E-commerce, like I said, can be trickier on that front because often they do have a massive flagship product that is like their thing—but keep that in mind.
Also keep in mind, as you are listening or watching this, that all of these are basically rules of thumb. There are caveats to everything, there are exceptions to everything, but this is just general rules to live by as a business buyer.
So that’s revenue.
The next thing we want to look at is traffic. Most businesses that we sell at Empire Flippers are what I call mono-channel traffic, which means they only have one traffic source. And technically, Empire Flippers is this too.
As much as I hate it, we are still very much beholden to SEO. Now, I’ve done a lot of other things and we’ve proven out some other channels, but nothing converts as good as SEO for us still. And that is definitely still the lion’s share of our traffic.
Most businesses we sell also have one channel of traffic, whether it’s paid media, SEO, or cold email—whatever it is. They tend to have one traffic source.
Now, that’s okay. But if our goal is to buy the least risky business, then part of our criteria should also be diversified traffic, where no one traffic source is making up, say, over 50% of the traffic that’s coming to your business.
Ideally, if you want the safest, you want three traffic channels proven out, each one making up like 33% or whatever. But that is very difficult to do.
Most sellers—most entrepreneurs—are also the marketers in a lot of ways for their businesses. And to be honest, it’s really hard to master more than one marketing channel if we’re being realistic. Some marketers spend their entire career just learning one channel and one way of doing that.
For example, with social media, you might have a marketer that spent their whole career learning how to do Meta ads, but they don’t know how to do organic content, even though it’s on the same exact platform. These are two different skill sets, two different disciplines.
So it’s very difficult for sellers to do this. Often, you as the buyer—one of the advantages you have—is by adding that traffic channel. But again, if our goal is to buy the safest business, the least risky possible, then we want diversified traffic sources. We want that well diversified, where we’re not reliant on one tech giant.
Which, by the way, that leads me to the next point: what kind of business should you buy?
If we are purely going by least risky, less likely to fail, then you should not buy an online business—which hurts my soul to say, because obviously I want you to buy an online business from me. Right?
But offline businesses are just safer. They’re more solid. They have more stability. Like your local HVAC, local plumber, your commercial cleaning company. They have other ways of making money that isn’t reliant on the volatile internet, where things change all the time. Right? An offline business is going to be less risky than an online business.
Now, I would play devil’s advocate to that in the sense that while that is true—an offline business, a brick-and-mortar business, a more traditional Main Street business—especially if you follow everything else I’ve been saying, is the less risky buy, your potential of making money is also much lower.
Now, you will probably make money if you follow that criteria, right? Because you’re probably buying a pretty safe business, but you are inherently geo-locked in terms of your growth with that business versus a digital business.
With a digital business, you can have explosive growth. I’ve mentioned this a few times: we had a buyer that bought a $180,000 Amazon FBA business from us, came back about 22 months later, selling it for over seven figures with us. Right?
Very tough to do that with a brick-and-mortar business. Not impossible. Not impossible at all. In fact, I’d say it’s more possible to do it with buying a brick-and-mortar business than going and starting a digital business, right, as long as you’re following this criteria.
But just keep in mind that if we buy the safest business, that often also means we’re making some trades. We are deciding, “Okay, I’m going to buy a very, very safe business, but I will make the trade that I’m just going to have less growth potential.”
And that’s one of the trades you have to do if you are very worried about risk. Right?
Online businesses are riskier than offline businesses—more Main Street businesses—because online businesses tend to have one tech giant that they’re kind of enslaved to. Like the affiliate guys usually are enslaved to Google with SEO because the profit margins are very hard to make paid media work with affiliate. Not impossible—I have friends that crush it with that—but it is much more difficult.
Same with e-commerce. A lot of times they are a slave to Meta ads or TikTok Shop now. Right? So this is very, very common, and this is something that Main Street businesses usually don’t have. Usually their online presence is kind of terrible. So keep that in mind.
All right, so what do we have so far?
A 15-year-old business; no one product making up over 40% of the revenue; and three different traffic sources that are spread evenly; and preferably an offline business.
If we are super concerned about risk, though, we also make the trade that we just won’t grow as much. So those are like four different criteria that you can use right now to help you go and find businesses that are likely going to be a safe bet.
But there is another thing we need to talk about here, and that’s size.
When a new business buyer—or a person—gets excited to buy a business, they really want to buy one, but they’re like, “I have no money.” Which is where they get into the gurus. They’re like, “$0 down, the seller pays you. You don’t need any money.”
And you know what? Those gurus are right. You don’t need that. We have done technically $0-down deals. It is possible. What they’re telling you is not false. You absolutely can do that.
But you’re a newbie buyer, I’m assuming, which means this is going to be really freaking hard for you to do. This is a very advanced strategy. Like, you are using what I call OPM—other people’s money—and you are doing all sorts of crazy deal-making with your debt stack to be able to do this. It’s very advanced, and I don’t recommend a new business buyer do that because you just don’t have the skills yet. And that’s okay. That’s all right.
Now, I bring this up because there are a bunch of ways you can get into buying a business for a very little amount of money. Like, there are websites—not Empire Flippers; we don’t sell businesses this low—but there are websites out there that you can technically go buy a profitable business for $5,000. Like, yeah, it might be making like 100 bucks a month, but it is technically a profitable business.
Now, if you are just starting out, I think doing something like this—buying a sub-$100,000 business—can make sense as long as you have other cash flow, other personal savings outside of what you’re spending on the business.
Now, this is not safe to do. These are very risky businesses. Businesses under $100,000 are significantly more risky because they are significantly smaller, they’re more fragile, they just haven’t had the time and scale and the growth to really build a moat. They’re very fragile. They’re like a leaf blowing in the wind.
Now, I still recommend this, though, if you’re just starting out, because we see big number and we get afraid. We see a small number and we think, “Okay, I can do that.” Right?
So you go in and buy, say, a $30,000 YouTube channel from me. Hey, maybe it works, maybe it doesn’t. $30,000, if you lose it, it’s going to suck, but it’s not the end of the world. Right? You can recover from this.
But more importantly, the reason why you might take that risk as a newbie business buyer is because you don’t know the process yet. And you should use a broker if you do this, by the way. You can use us, use someone else, doesn’t matter—definitely use us though. My KPIs will thank you.
The point of this is you are trying to learn, so you have to be able to make mistakes. You have to get some failures on your belt, and you’ve got to go through the process. This is why I recommend using a broker instead of doing private deal flow.
One thing I actually disagree with the gurus the most on—who are always talking about these $0-down deals or all that BS—is they always say, “Don’t use a broker. Brokers are terrible,” blah, blah, blah. They’re completely wrong.
Do use a broker for your first deal because, again, you don’t know what you’re doing. You should hire a broker.
Like, yeah, they might be a sell-side broker like us, and our fiduciary responsibility is to the seller. But the thing that brokers—or these gurus—don’t tell you, because they always say, “Oh, because the broker is on the side of the seller, of course they’re going to try to screw over the buyer,” or whatever, by making you pay more.
But the little dirty secret of business brokering is our repeat customers—at least for Empire Flippers—the people we make the most money with, is our buyers, not our sellers. Our sellers are our product. We can’t have buyers without the sellers. But business buyers tend to buy more than business sellers tend to sell.
A business seller, it might take them three to five years to sell one business, and then another three to five years to sell the next one. Versus a business buyer—we’ve had buyers who bought a business from us almost every month for a year. Like, as long as they have the funding, they can go really, really fast.
So it’s not in our interest to scam the buyer or put the buyer in an unreasonable position. Our mentality is always: we want a win, win, win.
Empire Flippers wins—we get paid because we help a seller have a life-changing exit, and we help the buyer buy that business for a reasonable price that hopefully is going to turn into a massive ROI for that buyer, so that buyer comes back and buys again from us. Right? That’s the whole goal.
So these gurus that say avoid brokers—I think that’s BS. You should definitely not do that if you’re brand new to buying a business. Because brokers can be incredible free education for you about the entire process: from signing an asset purchase agreement, to understanding how due diligence works, to even looking at these legal agreements, to looking at what a profit and loss statement looks like when it’s tallied up for the SDE. Right?
So brokers are very, very powerful. And I think if you are looking to buy a business with the least amount of risk, a good reputable broker—which is another topic we’ll get into in a second—a good reputable broker helps you lower that risk very significantly.
Now, on brokers: brokers are very much like real estate agents. Real estate agents—what do they do? They help people buy and sell houses.
Now, some of their clients are investors, and a lot of investors say the same thing as the gurus say: they hate real estate agents because real estate agents are salesmen. They can sell the house, but they’re not exactly going to help you learn about investing.
But they can teach you: how do you buy a house? What’s the process? What’s going on? Right? They can help you with all the basic stuff. But a lot of them are not actual real estate investors; they’re real estate salespeople. Right?
Business brokers are the same thing. There are not a whole lot of certifications you need to be a business broker, which means the skill sets vary wildly.
Now, there are some real estate agents that do understand investor needs, and they’re considered gold by those investors because that real estate agent knows what needs to happen. Same thing with business brokers. A lot of business brokers have no idea how to invest in a business or how to grow a business or what you should do—but some do, and those are gold for you as well.
So I do recommend using a business broker as part of minimizing your risk as well.
But now let’s move into the big part, which I think is probably the biggest misconception.
So I mentioned buying a small business to get started—like a very small, sub-$100K, maybe even sub-$30,000—right, just to understand that process. But if your goal—and the whole reason you do that—is to have the mistakes, right, you most likely will lose money, is my guess, when you’re first starting out.
But if the whole point is to buy the least risky business, this next part is the huge, just massive misconception in the M&A world: the bigger the business you buy, the less risky it becomes.
And ironically, you will most likely spend less of your own money on it—because once the business is big enough, let’s say it’s a $10 million valuation, something like that.
Now, if you’re brand new, you’re like, “10 million? I could never buy that.” Ironically, you buying that $10 million business—as long as you know the process—would probably be easier than you buying a $1 million business. And the $10 million business, just as a rule of thumb—of course, there are caveats to everything—will most likely be a lot safer than the $1 million business.
So how does that work? How do you go bigger where you spend less money—maybe none of your money—on it?
Well, this is the thing. Remember what I said at the beginning of this podcast about the failure rate with startups—20% close their doors in year one, 50% by year five.
So in the M&A world—and this is very important if you decide to sell your business—most business sellers think, “I need to sell the buyer on my business.” But really what’s happening in the M&A world is the buyer needs to sell the seller on letting them buy the business.
The reason why is because buyers are a commodity. There are tons of people who want to buy a business—tons of people with very deep pockets. Money is everywhere. But there are very few high-quality businesses for sale.
Which means if you get a $10 million deal, you can go to these other buyers with these deep pockets and raise your down payment from them.
In fact, I have a friend, my buddy Travis—he started Capital Pad. This is basically what they do. If a searcher finds a good business, they will give him the money he needs for the down payment and help him with the rest of the financing. Whether it’s 20% down like in an SBA loan context, or maybe they need some other kind of debt solution to buy the business, he will come and help them with that.
Why would they do that? Because these deals are rare. Good deals are very rare, and they’re the darling of the ball.
So the bigger the business you go, it actually becomes easier for you to buy the business, which is a great mindset-shattering thing when it comes to M&A.
This is why you can see some of these bigger gurus talk so much about $0-down deals. They probably really are doing a lot of them, but they are also much more skilled than you. They have done a lot of deals. They’ve been through a lot of failures as well to figure out how they do that.
But as you get going, the bigger the business you buy, the safer it becomes.
And here’s another crazy thing: if you buy a big business, you could—like, maybe you spent some money on that big business—you could then go buy smaller businesses in that area, more likely for less money.
What I mean by that is I have a friend, he has a marketing agency. I think it’s been a while since I’ve talked to him, but at the time he had acquired 14 different agencies underneath his agency, spending $0 down every time. And the sellers ended up working for him.
The reason why they did that is because he had such a bigger agency, he had such a well-oiled system, that he could make the promise: “If you sell your agency to me, I will let you focus on the thing you love. Maybe it’s sales, maybe it’s the marketing—whatever. And within 90 days you will be making more money than what you are making running your own agency. Plus you get equity in my mothership.”
So you’d get all these agencies say, “That sounds freaking great,” and they gave him their business. He was able to live up to this promise, and now they’re making more money and they have equity in something much more valuable than the agency that they were building.
So you can even use buying a bigger business as kind of your spear to go and buy more businesses, using even less of your own money.
So let’s recap.
If you want to buy the least risky business out there, age is the first step: 15 years and up. Obviously you’re going to have to make trade-offs when it comes to growth there.
If you’re looking at online businesses, it’s very hard to find an online business over 15 years old, so keep that in mind too.
Age is the first factor. Revenue diversity is the second factor. Traffic diversity—how you’re actually getting customers to you—is the third.
And then you want to make sure that we have some skill. So maybe we buy a riskier business that is smaller that we can fail with and learn. But then we go and buy a bigger business, a much bigger business that has full control of its business funnel.
That would be the basics of how to buy the least risky business possible.
Let me know what you guys think of this Greg ramble episode. Hopefully you guys found it valuable, and I will talk to you soon.
There you have it. I hope you enjoyed it. I hope it got you inspired at all the different things that are happening in this industry.
And of course, if you just want to buy a highly profitable business, you can always go to empireflippers.com/marketplace. Or maybe you want to make an exit of your highly profitable business—then you could go to empireflippers.com/sellyoursite.
I’ve been your host, Greg. If you enjoyed this episode, make sure you leave a review, give us a like, a follow, share it across social media.
Talk to you all soon. See you on the next episode.
