Most people suck at buying businesses.
Here's an easy framework I've used in 100+ deals (that actually works):
Here's an easy framework I've used in 100+ deals (that actually works):
People ask... "What type of business should I buy for cashflow?"
Here's my battle-tested framework.
I call SOWS.
You use it for...
Here's my battle-tested framework.
I call SOWS.
You use it for...
Finding the businesses that have:
• Lowest risk
• Profitability
• A reasonable price
• Potential for growth
• Simple (not easy) execution
SOWS stands for:
• Stale
• Old
• Weak
• Simple
It's a simple way to screen your first deals and build upon them. Let’s dive in:
• Lowest risk
• Profitability
• A reasonable price
• Potential for growth
• Simple (not easy) execution
SOWS stands for:
• Stale
• Old
• Weak
• Simple
It's a simple way to screen your first deals and build upon them. Let’s dive in:
1. Stale
Half the businesses in your hometown fit.
The place runs okay, but:
• No testimonials
• Website from 2005
• Limited social media
• Still use a fax machine
This leaves a lot of room for easy innovation when you buy...
AND you don't price that into the purchase.
Half the businesses in your hometown fit.
The place runs okay, but:
• No testimonials
• Website from 2005
• Limited social media
• Still use a fax machine
This leaves a lot of room for easy innovation when you buy...
AND you don't price that into the purchase.
2. Old
Businesses that have existed for 5 years+
If you want cashflow...
Give me a 25-year-old car wash over a startup run by 25-year-olds any day.
The Lindy Effect says if it's existed for some time it will likely continue to exist.
Old biz’s can be hidden gems.
Businesses that have existed for 5 years+
If you want cashflow...
Give me a 25-year-old car wash over a startup run by 25-year-olds any day.
The Lindy Effect says if it's existed for some time it will likely continue to exist.
Old biz’s can be hidden gems.
3. Weak
Buy a biz with poor competition.
When was the last time you got a plumber:
• On time
• With automated billing
• Who sent follow-up texts?
There are 3 easy fixes right there to make you better than competitors.
Buy a biz with poor competition.
When was the last time you got a plumber:
• On time
• With automated billing
• Who sent follow-up texts?
There are 3 easy fixes right there to make you better than competitors.
4. Simple
Simple business model.
Simple operations.
If you can easily explain your first few deals to an 8-year-old, you’re on the right track.
Simple business model.
Simple operations.
If you can easily explain your first few deals to an 8-year-old, you’re on the right track.
Don’t get distracted by shiny things when looking for your first acquisition.
Boring + Time + New Owner = $$$
Run with what already works.
Just make it better.
Boring + Time + New Owner = $$$
Run with what already works.
Just make it better.
Believe me, we can get more complex. But we don't have to start that way.
If you enjoyed this thread:
1. Follow me @Codie_Sanchez for more.
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If you enjoyed this thread:
1. Follow me @Codie_Sanchez for more.
2. RT the 1st Tweet below to share this thread with your audience.
If you're looking for more ways to be successful in business...
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I write deep-dive breakdowns & playbooks each week to 185,000+ others.
Subscribe to the newsletter here:
contrarianthinking.co
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