Youtube Star And Accomplished Investor Codie Sanchez Makes $50M/Year by Buying “Boring Businesses”
Codie Sanchez—accomplished investor, Youtube star, and the founder of Contrarian Thinking—has taken the internet by storm by sharing the secret to her $50 million a year revenue: buying boring businesses.
For those who prefer facts over dreams and profits over passions, Codie has exclusive tips for aspiring small business buyers that can make you millions!
Codie’s Cubicle to CEO® Story
Many of our podcast guests have entrepreneurial journeys that began with a desire to own their own schedule or a deep dive into a passion project. Codie’s catalyst, however, started with a comment.
“I remember vividly the exact moment,” says Codie.
In a past life, Codie was a senior manager at a finance firm. She attended a conference with some colleagues and clients and was preparing to step on stage to speak when she felt something unusual…
“I felt this pressure on top of my head, like this tapping. It was one of the senior partners at the firm,” she shares. “He was essentially patting me on the head, and I remember he said, ‘Go be a good little girl. You’re up next.’” (Do you feel the collective cringe?? Booooooo, Steve!)
The surrounding employees laughed… but inside Codie screamed.
“I didn’t have a cool Ari from Entourage comeback,” she says. “I remember just wanting to shrink and die.”
But that moment—and patronizing comment—was the impetus for Codie’s success.
Today, Codie Sanchez is an accomplished, Youtube-famous investor who owns a portfolio of “boring businesses” that collectively make $50 MILLION A YEAR!!!
In other words, she’s a WAY bigger deal than Steve.
“The world of entrepreneurship is definitely not all unicorns and rainbows,” she says. “[But] every time things get a little bit difficult… I go back to my little ‘F you, Steve’ mentality.”
The Secret to Codie’s Success: “Boring Businesses”
We all love those stories of entrepreneurs who finally took the leap of faith and launched their own business. But just like Codie’s Cubicle to CEO® story, the secret to her success is far from conventional…
In fact, it’s kind of… boring.
Codie brings in millions of dollars every year, by buying what she lovingly calls “boring” small businesses.
“These are the stores that are all around you that you would never even think to profit from,” she says. “Mom-and-pop small businesses, a corner store, a landscaping company, a car wash, a laundromat… all are part of this ecosystem.”
To be clear, Codie is a BIG fan of unique, clever, and passionate small business owners… but she never wanted to BE one of them.
Like many of our past guests, Codie shared the desire to escape the corporate world, to graduate from a cubicle. But, when she reached the fork in the road and saw the “startup” sign overhead, she decided to go a different direction.
“The problem with a startup is you start by paying money with the hope that one day in the future you will make money,” says Codie. “What if, instead, you could buy the profits on day one?”
Some entrepreneurs are fueled by a dream, a passion; Codie, however, is fueled by numbers.
“We invest in what I call facts, not dreams,” says Codie. “If people want to start something not because [it’s] the thing that they’re massively passionate about, but instead they want cash flow… I think you’re crazy to not buy your profits instead.”
Corie’s checklist for the perfect small business buy isn’t a combination of flashy qualities like “unique,” “clever,” or “genius.” In fact, it’s sort of the opposite…
“SOWS is how I decide what type of business to buy,” says Codie. “I want it to be stale, old, weak, and simple.”
- Stale → No bells and whistles (think: they’re still using fax machines or have an outdated, slow website).
- Old → Established track record. More than 3–5 years (the older the better—past success predicts future possibility).
- Weak → Minimal or lackluster competition. When was the last time a landscaping company blew you away with their customer experience or included simple innovations like automated text reminders?
- Simple → You have to easily understand the business model. Bye-bye, “proprietary tech” companies!
These businesses aren’t necessarily attractive or impressive. They aren’t managing giant subscriptions and affiliate programs. They’re not shiny new startups, parading about with “the next best thing.”
They’re basic, bare bones, BORING… but that’s also why they’re PERFECT.
“There’s all this opportunity to take our knowledge as ‘young, tech-savvy professionals’ and turn it into something pretty incredible,” says Codie.
Less Competition = More Opportunity
Feeling curious?? Check out one of Codie’s latest boring small business buys below!
Codie’s Latest Boring Business Buy: a $60K Acquisition Set to Make $300K in 2023
Meet Codie’s latest purchase: Approachment.
Codie discovered Approachment, because many of her own companies were using their service. Approachment essentially pairs technology with outsourced talent to provide 24/7 customer service via chat. It allows companies to offer live support from real humans who can schedule business calls, respond to leads, and more—immediately.
This boring small business is also, in Codie’s words, a “fax machine goldmine.”
Their website was slow and littered with corny stock photos. It was unclear what services they offered. The whole company was out-of-date in every way, shape, and form… but the service? The service was AMAZING (and relevant, considering the current buzz around Chat-GPT).
Codie did some research and discovered that roughly 83% of consumers expect small businesses to respond within one hour. But, how often does the average small business actually respond? Around 48 hours!
“[This delay] decreases your likelihood to close the sale exponentially!” Codie explains. “I was like, ‘Oh my god, we don’t have to be better. We don’t have to be cheaper. We’re just going to be faster.’”
Codie approached the owner of the company to see if he was interested in selling. Turns out, he was very ready to retire.
“I’ve found that about 60% of all owners who run a business at any point in time are ready to sell,” says Codie. “They just don’t know it.”
So, they struck a deal.
At the time, Approachment was bringing in roughly $75,000 in revenue, with 40–50% profit margins. Codie purchased the business for $60,000 (ish) and immediately began implementing changes that would improve the already-impressive service. Approachment employees were working at 25% capacity, so Codie addressed the issue to increase clients. She applied Approachment’s software to her other companies to convert costs from her other boring businesses into revenue.
“It’s just old and outdated,” she says. “We get to shine it up.”
In 2023, Codie expects Approachment will earn $300,000 in revenue, with the same profit margin (40–50%). Additionally, once she’s developed strong recurring subscriptions, Codie anticipates Approachment could sell for $2 million!
(If these numbers have piqued your interest, keep reading. You’ll love the next section full of juicy tips from Codie for budding small business buyers!)
Quick Tips For Aspiring Small “Boring Business” Buyers
Ready to pursue boring businesses over uncertain startups? Codie has exclusive tips to help you become a small business buyer!
BEFORE YOU BUY…
- Know what to avoid → No restaurants, no hotels, and no FBA Amazon sellers.
- Know what to prioritize → Newsletters, ‘unfair advantage’ businesses (something related to the business you already have), etc.
- Consider seller financing → One of the primary problems buyers face when looking into purchasing their own business is a lack of cash. According to Codie, seller financing is THE WAY to buy a business without using your own money. “Sixty percent of all businesses have some component of seller financing,” says Codie. “You have to educate sellers on how it works, but that’s how I bought the majority of my businesses.
AFTER YOU BUY…
- Increase your prices → Most small businesses are undervalued on their prices (some by as much as 3–5 times!). When you’re looking at buying a boring business, keep your eyes peeled for this common problem. Once you’ve made the sale, charge what the services or products are actually worth!
- Sell more products/services → If you have the opportunity to do so, add more products/services to increase revenue. For instance, after purchasing Approachment, Codie added “phone” to the list of customer service options (in addition to chat).
- Focus on cutting costs → Instead of focusing your attention on increasing revenue, spend some time evaluating your liabilities. “Most people think that the way to make more money in their business is to get more clients,” says Codie. “They can actually decrease the places that they’re spending on to be more efficient.” Codie also suggests using future acquisitions (like Approachment) to cut costs in your other businesses. In other words, turn your liabilities into cash-flowing ASSETS.
“Now is the TIME!”
If you’ve ever considered starting your own small business, stop and consider being a small business buyer instead, because according to Codie, NOW IS THE TIME!
“It’s just math,” says Codie.
“There are more baby boomers retiring than ever before, and more baby boomers own businesses than any other demographic. There is less demand for buying a business than there is supply of businesses available. Anytime you have a demand and supply imbalance that means opportunity. That area in the middle is your cash.”
Additionally, Codie says if we don’t seize the opportunity to buy these businesses (specifically, she says, in the next 24–48 months), many will just shut down.
“You’re not taking advantage of somebody’s legacy. You’re actually handing somebody an annuity and a retirement plan in a world where we don’t have great options.”
Another reason Codie loves buying small businesses is simply because she wants to see them THRIVE. She talks about avoiding Amazon, choosing the local coffee shop over Starbucks, and practicing intentionality when she shops. Codie thinks we should be supporting these small boring businesses not only as consumers, but as investors.
“I think there should be more communities and less conglomerates,” says Codie. “If we come in and buy these small businesses. It makes our communities a lot more interesting.”
Wouldn’t you agree?
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Connect with Codie:
- Sign up for the Contrarian Thinking newsletter.
- If you’re ready to learn about cash-flowing assets and passive investments, join our premium community, Contrarian Cashflow, for playbooks, exclusive interviews, an online community, and more.
- Dive deeper into small business acquisitions by taking Corie’s Unconventional Acquisitions Small Business Buying course.
