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About the Video/Host:

Codie Sanchez is an entrepreneur, investor, and founder of Contrarian Thinking, a platform that educates and empowers individuals to buy and grow businesses. With a background in finance and private equity, Codie has closed hundreds of deals and built a portfolio of 26 businesses. She is passionate about helping others achieve financial freedom through business ownership.

Summary:
Codie Sanchez shares her expertise in buying and growing businesses, emphasizing the importance of ownership and decentralization. She highlights the ease of buying profits compared to building them and encourages listeners to work smarter, not harder. Codie breaks down the ten steps to buying a business and provides insights into each step. She also discusses the current market conditions and the opportunities available for acquiring businesses. Codie emphasizes the need to align profits with purpose and create a positive impact on communities and society.

Key Takeaways:

• Ownership is crucial for a thriving society, and decentralization is the solution to the concentration of power in the hands of a few.
• It is easier to buy profits than to build them, and the key is to leverage other people's money through leveraged buyouts (LBOs).
• The current market conditions, including the retirement of baby boomers and the economic impact of COVID-19, present opportunities for acquiring businesses.
• The "get rich tripod" consists of cash, experience, and sweat as leverage for acquiring businesses.
• The best way to find deals is within your personal ecosystem, such as the company you work for, pay, compete with, or get paid by.

Quotes:

• "Easier to buy profits than it is to build them."
• "Ownership is the solution to decentralization."
• "The big keep getting bigger, and the little guy gets hammered."
• "It's easier to buy a business than to build one."
• "The information is free, but it comes with strings attached."
• "The world gets better when all of us have skin in the game."
• "Buy when there's blood in the streets, even if that blood is your own."
• "The exact opposite of all the books we were read early on is that the richest guys in the world tell us you must focus on one thing."
• "It's easier to buy a business than to build one."
• "The highest leverage activity is cash."
• "The average small business hasn't raised their prices in eight years."
• "The money is made when most people are fearful and greedy."

The Article:

How2Exit Review -The Power of Acquisitions: Building Wealth and Ownership

If you guys don't know how to buy businesses, if you don't know acquisitions, if you don't know deal-making, I think you're up at all-time low levels for ownership in this country. The big keep getting bigger and the little guy gets hammered. What do you think that does to our society at large? If we allow only a few to own, we are putting ourselves, our kids, our future generations in a really difficult place. - Codie Sanchez

In today's world, where the gap between the rich and the poor continues to widen, it is becoming increasingly important for individuals to take control of their financial future. The traditional path of working a 9-to-5 job and relying on a single source of income is no longer sufficient to build wealth and achieve financial freedom. Instead, individuals need to adopt a contrarian mindset and explore alternative strategies that can help them break free from the cycle of financial struggle.

One such strategy is the power of acquisitions. Acquiring businesses can provide individuals with a unique opportunity to generate wealth and create a lasting impact on their communities. By buying existing businesses, individuals can tap into established revenue streams, leverage the expertise of experienced operators, and scale their operations to new heights. In this thought leadership article, we will explore the power of acquisitions and how individuals can use this strategy to build wealth and ownership.

The Acquisition Playbook: Easier to Buy Profits Than to Build Them

It is easier to buy profits than it is to build them. It is way easier. Why? A contrarian thinking. I've always had this purpose of I don't buy into people's hopes and dreams, AKA venture capital. I buy into facts and realities, AKA private equity. - Codie Sanchez

Contrary to popular belief, building a successful business from scratch is not the only path to financial success. In fact, it is often easier and more efficient to acquire existing businesses that are already generating profits. By acquiring profitable businesses, individuals can bypass the challenges and uncertainties associated with starting from scratch and instead focus on scaling and optimizing existing operations.

The acquisition playbook involves a series of steps that individuals can follow to identify, evaluate, and acquire businesses. These steps include:

1. Platform Acquisition: Start by acquiring a business that serves as a platform for future growth. This could be a business in a sector that you are familiar with or have expertise in.

2. Add-On Acquisition: Expand your revenue streams by acquiring complementary businesses. This could involve adding new products or services to your existing operations or entering new markets.

3. Vertical Acquisition: Acquire competitors or businesses in the same industry to consolidate market share and increase profitability. This strategy allows you to eliminate competition and gain a stronger foothold in the market.

4. Asset Acquisition: Increase capacity and efficiency by acquiring assets such as machinery, equipment, or real estate. This allows you to maximize the utilization of your resources and generate higher profits.

5. Satellite Acquisition: Diversify your revenue streams by acquiring businesses in related industries. This strategy allows you to leverage existing infrastructure and expertise to enter new markets and expand your customer base.

6. Horizontal Acquisition: Acquire businesses in different geographic locations to expand your reach and tap into new customer segments. This strategy allows you to leverage economies of scale and increase profitability.

7. Heart Asset Real Estate: Acquire the commercial properties or real estate that your businesses operate in. This allows you to gain control over your operating costs and potentially generate additional income through rental or lease agreements.

By following this acquisition playbook, individuals can gradually build a portfolio of businesses that generate consistent profits and provide long-term financial stability. The key is to approach each acquisition with a strategic mindset and a focus on creating value.

Overcoming Barriers: Financing and Deal Structuring

The big companies and the big government are forcing companies to close. Target stays open, your local corner store has to close. Walmart stays open, your local corner grocery store has to close. As they close down, these guys steal their market share. We're going to make sure that doesn't happen anymore. - Codie Sanchez

One of the biggest barriers to entry in the world of acquisitions is financing. Many individuals believe that they need a large amount of capital to acquire businesses, but this is not always the case. There are several financing options available that can help individuals overcome this barrier and make acquisitions more accessible.

One financing option is the Small Business Administration (SBA) loan. The SBA provides loans to individuals looking to acquire businesses, with the loan amount typically covering up to 90% of the purchase price. SBA loans often have favorable terms and interest rates, making them an attractive option for individuals without significant capital.

Another financing option is seller financing, where the seller of the business provides financing to the buyer. This can be a win-win situation for both parties, as the buyer can acquire the business without a large upfront payment, and the seller can receive regular payments over time. Seller financing is a common practice in small business acquisitions, with the terms and conditions negotiated between the buyer and seller.

Lastly, individuals can explore other people's money (OPM) as a financing option. This involves raising capital from friends, family, or investors to fund the acquisition. By leveraging OPM, individuals can acquire businesses without using their own capital, allowing them to preserve their financial resources and mitigate risk.

In addition to financing, deal structuring is another critical aspect of successful acquisitions. Negotiating the terms of the deal, including the purchase price, payment terms, and any contingencies, is crucial to ensure a fair and mutually beneficial agreement. By carefully structuring the deal, individuals can protect their interests and maximize the value they receive from the acquisition.

The Impact of Acquisitions: Profits and Purpose

The information is free, but it comes with strings attached. What is the number one reason people leave jobs? Boss. Categorically, by a scale of three, their boss. If you guys buy these businesses, what do you become? So don't suck. Be better to the next generation than you were treated yourself. How about when you're an owner, give your people skin in the game? How about as you build your business, you also build up your community? How about you do right by those that help you profit? - Codie Sanchez

The impact of acquisitions goes beyond financial success. By acquiring businesses and becoming owners, individuals have the opportunity to create a positive impact on their communities and society at large. This can be achieved by adopting a purpose-driven approach to business ownership and prioritizing the well-being of employees, customers, and the local community.

One way to create a positive impact is by empowering employees and giving them a stake in the business. By offering equity or profit-sharing opportunities, individuals can align the interests of employees with the success of the business, fostering a sense of ownership and motivation. This not only improves employee satisfaction but also drives better business performance.

Another way to make a difference is by supporting local businesses and suppliers. By sourcing products and services locally, individuals can contribute to the growth and sustainability of their communities. This helps create a vibrant local economy and fosters a sense of community pride.

Additionally, individuals can use their businesses as a platform for social and environmental initiatives. By implementing sustainable practices, supporting charitable causes, or promoting diversity and inclusion, individuals can make a positive impact on society and contribute to a more equitable and sustainable future.

Conclusion: Building a Better Future Through Acquisitions

We are having a massive shift from the fact that baby boomers got accelerated by COVID. These baby boomers got tired after the businesses closed down. As those companies are closing down, what happens? Who's buying those? The big boys. So the big companies and the big government are forcing companies to close. Target stays open, your local corner store has to close. Walmart stays open, your local corner grocery store has to close. As they close down, these guys steal their market share. We're going to make sure that doesn't happen anymore. - Codie Sanchez

In conclusion, the power of acquisitions lies in its ability to create wealth, ownership, and positive change. By acquiring businesses, individuals can tap into established revenue streams, leverage existing expertise, and scale their operations to new heights. This strategy offers a viable alternative to traditional methods of wealth creation and provides individuals with the opportunity to take control of their financial future.

However, the impact of acquisitions goes beyond financial success. By adopting a purpose-driven approach to business ownership, individuals can make a positive impact on their communities and society at large. By empowering employees, supporting local businesses, and championing social and environmental initiatives, individuals can contribute to a more equitable and sustainable future.

As we navigate through challenging times, such as economic downturns and market uncertainties, the power of acquisitions becomes even more relevant. In times of crisis, there are opportunities to acquire businesses at discounted prices and create value in the face of adversity. By embracing the acquisition playbook and leveraging financing options, individuals can overcome barriers and seize these opportunities.

The future of business ownership lies in the hands of those who are willing to think differently, take calculated risks, and embrace the power of acquisitions. By doing so, individuals can build wealth, create ownership opportunities, and make a lasting impact on their communities. It is time to break free from the traditional mindset and explore the possibilities that acquisitions offer. The time is now to build a better future through acquisitions.

Watch it here: https://youtu.be/FXcgzUmlD2o?si=wFTRxjEBqWPBUtg7

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