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Is buying and selling businesses for profit feasible?

Yes, there are several professionals / experts who make their living by turning around businesses. Someone who knows the in and out of a specific industry / business would have a knack of recognizing under performing businesses. If some of these under performing businesses are willing to exit, the expert can get it at an attractive valuation since he is thorough with the industry.

Over the next one or two years, he/she can work on improving the efficiency and processes within the company which would yield higher profit margins and better revenue streams. After having a series of good quarters, the business is ready to be sold again, but for a much larger amount than what it was bought at. Now, the expert can leverage his expertise in this area to his advantage and score a higher valuation. This is a standard practice and many Private Equity companies rely on this to get good returns in a matter of 3 - 5 years.

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