When I used to give seminars on buying businesses, one of the most "frequently asked" questions I got was exactly what industry or businesses are the best to get involved with...and which ones are the worst, and why.

My answer today is the exact same as it was back then -- and will never change.

In my humble opinion, and this is after 50 years of buying over 200 businesses and helping thousands of other people buy businesses as well, the companies I like to buy more than anything else are always -- without exception -- manufacturing businesses.

Why?

Simply because, while they are on the expensive side, theres less risk and way less failure. In other words, in order to get in a manufacturing business, you have money in equipment, you have money in accounts receivable, you have money in inventory. So, it costs more. But -- and this is really important -- in manufacturing, the success of your company depends on the reliability of your product (which are reliable) and not people (who are unreliable).

All of which is why I think manufacturing businesses (product-based) are the best kind of businesses to buy...and service businesses (people-based) are the absolute worst businesses to buy.

It all comes down to reliability. And like it or not...believe it or not...think it's fair or not...products are more reliable that people.