← The Goal Digger Podcast | Top Business and Marketing Podcast for Creatives, Entrepreneurs, and Women in Business
The Goal Digger Podcast | Top Business and Marketing Podcast for Creatives, Entrepreneurs, and Women in Business
833: Why Isn’t Anyone Talking About This Secret to Building Wealth?!
00:54:49
With Codie Sanchez and Jenna Kutcher
Loading summary
Transcript62 lines
- [00:02]
A
Learn deal making, not negotiation. That's something different. But if you learn deal making, which is how to get more ownership in things based on the value that you bring, you will live your life with a lot more wealth than the average American will.
- [00:18]
B
I'm Jenna Kutcher, your host of the Gold Digger podcast. I escaped the corporate world at the age of 23 with nothing more than a $300 camera from Craigslist and a dream. Now I'm running a seven figure online business that feel even better than it looks. All from my house in small town Minnesota with my family here, we value time as our currency. We mix the woo and the work and we are in the pursuit of building businesses that give us the freedom to live lives that we love. I've always loved turning big goals into reality and I'm here to help you do the same. This isn't just a peek behind the curtain. Come along with me and my guests as we tear the whole curtain down. Every week we tackle practical no fluff marketing strategies and host honest discussions on what works, works and what doesn't. Join me and my expert guests for actionable insights to help you grow your dream business with confidence. Pull up a seat and get ready to be challenged, inspired and empowered. This is the Gold Digger podcast. I bet you haven't thought about this To Build wealth what if the key to financial freedom isn't starting your own business, but what if it was buying an ordinary business that other people overlook? I am so excited to introduce you to Cody Sanchez. She is a power warehouse in the world of small business and the founder and the CEO of Contrarian Thinking. She is here to share insights from her upcoming book Main Street Millionaire how to Make Extraordinary Wealth Buying Ordinary Businesses. Cody believes that buying established, cash flowing businesses is one of the most underrated paths to wealth, especially in today's economy. In today's conversation she shares why there's a golden opportunity for the next generation to step up and take ownership when the previous generation retires. Cody is all about teaching no nonsense strategies for finding and acquiring businesses that might seem unexciting but that are incredibly profitable. She is literally bringing us Zillow for Businesses on today's podcast where she is presenting three different companies to me and we're talking through whether you would want to buy them or not. Whether you are a seasoned entrepreneur or you're just starting out. This is amazing. This episode is filled with tips and wisdom. It is going to inspire you to think differently, to think bigger and to take action to build your own Main Street Millionaire journey. Cody, I'm so excited to welcome you to the Gold Digger podcast. Picture this. You're at a party and someone asks you what you do as a marketer. Like, how do you even begin to describe it? You have to generate leads, score them, contact them, create content, gather data, and tomorrow you have to do it all over again. And you also are spending time wondering if all that you're doing is even working. Marketers are spread way too thin. But HubSpot has a better way. With the help of HubSpot's collection of AI tools, Breeze and features like content Remix, you can turn one piece of content into a suite of assets. You can also pinpoint the best prospects with predictive lead scoring and level up your campaign KPIs with a new analytics suite. So your day to day becomes less busy work and more driving revenue through the roof. And most importantly, you'll have a way easier time describing what you do at parties. Visit HubSpot.com marketers to learn more. That's HubSpot.com marketers. Okay, Cody, today is gonna be a day where the Gold Digger podcast gets exposed to an entirely new idea. And I can't always say that. I mean, we've had 800 episodes and this is something that we've never talked about on the show. So you get to be the first. So you have had a ton of success buying other people's businesses and we're going to dive into that today. But let's start at the very top. If you could share one game changing secret that you believe every aspiring entrepreneur should know about, CR creating wealth through small business ownership, what would it be?
- [04:16]
A
The secret is three steps to rich, I call it. So here's the idea. When you're first starting out, you think that every problem is a how problem. I have a problem. How do I solve this thing? Seems reasonable. Then you become a little bit better of an entrepreneur and you realize it's not usually a how problem, it's a who who's already had 10,000 hours on this. I can steal their 10,000 hours. I can solve my solution way faster. The level three rich, the really, really rich, they don't do either of those things. They go straight to buy, which is, I have a problem, how to buy my way with a lot of certainty into a solution. And so that might be like, I need to hire somebody who's great for this segment of my business. Could I do an. It's called an aqua hire. So could I hire somebody else who has another business that's already doing really well at this. But they could come into my, my enterprise and do even better. It might be like, could I buy, for instance, for your newbies if you are new in business, struggling right now, let's say, or just don't have a lot of experience under your belt instead of going and trying to grow your email list unless they have your course. If they have your course, they're probably fine. But let's say, let's say they want to add on top of that, maybe they go to Deuce, which is a newsletter acquisition platform, and they buy an email list and instead of like, well, Cody, yeah, that'd be great. Of course I'd buy everything if I just had all the money in the world. Yes, buy is an interesting word because it doesn't always mean exchange of money. It means an exchange of value. We used to buy things with the bartering method. Right. And so we teach all these strategies now about how can I like, so let's say I'm Jenna and I want to grow an extra 3,000 people email list. Well, I could go to Google Ads and I could know that I might pay $2 per email and so I could pay for 3,000 emails. I'm going to pay $6,000. Okay, option one, I'm going to have to know how to do Google Ads. I'm going to have to make sure I target the right people for my email list. I'm probably going to have to do some experimenting. So instead of $6,000, it's probably going to end up like $10,000 plus some time. Okay, so now I know it's going to cost me 10,000 to get those. Well, what if I could go to Deuce and I see a listing there for a female finance newsletter? Let's say that's what I have to. I have a finance business. Yeah, I'm going to go into it and it has 3,000 subscribers and she wants $5,000 for it. Well, right there, it's already cheaper than the 10,000. But maybe I could be even smarter than that. Maybe I could go to her and say, hey, you haven't monetized this newsletter yet. You have like these 3,000 people. Have you ever sold them anything yet? Why don't we do this? Why don't I try to sell them my products? I'll place them there. You can take 50 or 60% of all the money that we generate by me putting my product through your email list. You can take most of it, let's say most of the revenue. But if it works. I want to have what's called a right of first refusal, a roer to buy your business that email list for a certain amount of cash. Would you be open to that? And what are you doing then? You're basically testing a list to see if it fits you both make money, it costs you nothing upfront. And if you like the list, you can buy it for pennies on the dollar because you've already checked the thing. And so this is obviously a little bit more complex than just put dollar into Google machine, get email back, but it is much cheaper. And once you learn how to do this, it's really hard to be poor again.
- [07:38]
B
How did you learn how to do this? I mean, this is like crazy to me. And when I think about my own journey, I have absolutely been stuck in the how and who, right? And obviously I've landed where I've landed, but I think for a lot of people, starting today, it's like, is this even possible? How do I get this success? So like, how did you figure this out?
- [07:59]
A
I got really lucky in a weird way, which is I was super risk averse. I didn't want to leave my job. I, you know, daughter of immigrants, golden handcuffs. I worked in finance for 12 years. I kind of hated what I did, but I just kept job hopping to other companies, thinking it was the job, it was the boss, it was the position, not realizing that the industry wasn't right for me. And I'm kind of unemployable probably like you, like, we're not good employees, we're good bosses maybe, but like not great employees. And so that was me for a long time. But thankfully before I was in finance, I was a journalist. And so as a journalist, I learned really only one skillset, which was extreme curiosity. How do I ask question after question after question in order to be able to write about something I knew nothing about? And because I got journalism and curiosity paired with finance and how to make money, I just went into this industry and was like, how'd you do that? What happened there? Why do you call it that? How'd you make all that money? And I was totally comfortable asking these weird questions that are probably not that appropriate. And so I got to steal their 10,000 hours. And I did that for years until finally, because I was such a wuss, I had done it for long enough that I was like, wait a second, are we doing? We're like buying businesses with other people's money using all the skill sets that I have. I do all the work. I find the deal. I close the deal, I analyze the deal, and this guy makes 10 million bucks. Like, why am I not making the 10 million bucks? I'm doing all the work. And that was finally when I was like, all right, maybe I could start really small, and then one day, I could be that guy making 10 million bucks a year.
- [09:32]
B
What was your first step when you finally made the leap of faith? Because I think a lot of people can find themselves in those rooms in those situations where you recognize, like, you're a cog in a big machine, right? Like, you are not only replaceable, but you are also serving something so much bigger than just you. And so what was your first move as an independent person? Moving through this?
- [09:56]
A
Yeah. Well, the first thing I did, actually, is I went in rooms of entrepreneurs, because I wasn't an entrepreneur. I was working inside of a business. And so I was like, all right, I got to get around people who have actually taken this risk before, because I think if maybe I realized they're human just like me, I could do this too. And so I went to, like, a series of events and conferences, and it was super uncomfortable for me. I'm kind of an introvert, actually. And so, you know, I'm like a finance corporate person at, like, Sumo Con, you know, like Noah Kagan. It's like all these weird, weird Internet marketer nerds. And then I'm like, you know, beep, boop, bop in my suit, talking about spreadsheets. Like, I was so out of place. And so if you're struggling right now with how to build your own thing or how do I get to the next level, my answer is, always go where the game is played with other people whose Tuesday looks like your dream day. Like, you want to go where people already have the life that you want. And I needed to do that physically, because I do actually believe that inspiration is super, super powerful. To begin, you have to have motivation and discipline eventually, but you. You can't. It's much easier to light a fire by striking a match than it is by slowly, slowly, slowly turning a piece of wood against another piece of wood to create enough friction that. That just. It's hard. And so strike a match. So I went into a room with a bunch of people that were entrepreneurs. That's actually why I built the Contrarian Community, our group, because we just left yesterday, so it's top of mind for me. But we do these events every year where we get together with other humans who want to buy businesses and to get in a room with other people that Are already doing it, have done it in the middle of done it, having done it three times, you're like, oh, you just, like, do those things. So that's step one. Go where the game's played.
- [11:34]
B
Yeah.
- [11:34]
A
And then the second step was, you know, these people are already doing this thing. It's been done. I'm not trying to do anything totally novel. I'm not curing cancer. I'm not sending spaceships to the moon. Somebody's done this before. In fact, a lot of somebody's. So could I just sit with them and learn their processes and write myself a little roadmap? We call these our guidebooks. And so it's like, all right, what's step one? What did you do the first time you bought a deal? What'd you do? Step two, and then, like, all the way till you closed it, and let's go back and look at where you made mistakes. And so I just. I think I wrote it like an article. I was like, okay, this is kind of how you go, and this is what happens. And only after I had, like, been in the rooms, I had written the guidebooks, I had written the playbook, did I realize, okay, now, like, I know where I want to go. I've seen other people that are there, and I have a map that I can follow to get there, and that if I didn't have that level, I never would have taken the jump.
- [12:31]
B
I think this is so good. And it's. It's so funny, Cody, because it throws me back to years ago, when I joined a mastermind for the first time. And it was fascinating because at the time, I was a wedding photographer living in a village of 1200 people in Wisconsin, and my world of entrepreneurship was so small. Right. And it was so interesting because it was Lewis Howe's mastermind, and a lot of the people that were in it were in, like, the health and fitness arena. And it was interesting to me because I, like, people were saying things that I was like, I can't believe that just came out of their mouths of, like, I want to make a million dollars. And I was like, you're saying that out loud. Like, I couldn't. I couldn't even believe that. Like, there were words being put into it. And I. I think that it's so powerful to get yourself out of the comfort zone, but to put yourself into those situations where you see that. And for a lot of people, you know, that requires investment to get into those rooms, and it requires betting on yourself that, like, you'll make that investment. Worth it. So what would you say to somebody that's listening? They're like, well, great, I want to get into those rooms, but I can't afford to get into those rooms. Where do you start?
- [13:38]
A
Yeah, it's a great point. I always like the fastest path as opposed to a meandering one. So wherever I can. Again, you've heard me say it before. Like, I think typically when you are looking at knowledge, when you buy, you get paid. Like, and so that's always been my philosophy. You buy, you get paid. You buy, you get paid. And because it's up to you, like, I will be my number one. I will be the number one student for every mentor I've ever had, and I will. Like, it doesn't even matter if they're kind of a shitty teacher. Like, I'm just going to. I own a school, squeeze every ounce I can out of it. And so that would be step one. But let's say, like, I just had zero dollars. I think that's why things like books are so important and probably why I wrote mine. Main Street Millionaire. I kind of. I believe that you do less if you don't have skin in the game. And so I think you should spend some amount of money if it's 30 bucks on a book and a little bit of time. So you could listen to a podcast. We do a lot of these. They could go to all of our social channels. You could go to my YouTube. You could learn all of this for free. 99. The price problem is if you don't either spend a decent amount of your time, which books require. That's why I like books. Like, you can't be distracted and read. You can be distracted and do a podcast. You can be distracted and watch a YouTube video. I do it all the time. But you can't be distracted and read. And so I think a small investment plus a highlighter and a pen and a book is the first step. And then if you read the book and you're like, yeah, I like this idea about of acquisitions. I actually want to do it, then you'll be able to figure out a way to get in a room to spend a little bit more or to just start taking your first steps. And even better, if you read it and you don't like it, you've just saved yourself maybe years of work and a lot of money by realizing, huh, you know, I want this thing, but I'm not willing to do what it takes to get it. So I'm going to pass on this for now. Which is also totally fine.
- [15:28]
B
Oh my gosh. I love that you bring this up for so many reasons. I mean, you and I know so many authors, and the amount of work and time and energy that goes into a book, it literally makes no sense for us to do it. And yet we do it. I mean, it is the worst move of all time. And yet the message has to matter so deeply that it is absolutely the best work you've ever done. So if you have ever wanted to learn from someone and they have a book out there, I will tell you a million times over, go get that book. Because when you create a book, you are putting your best work into the book. It is like this eternalization in a world that is so ever changing on the Internet, it's just such a different project. So I think books are one of the most incredible places to start. And I'm so glad you brought that up. One thing that you talk about and I want to hit on is you talk about how today's market is great for building wealth, and I feel like a lot of people think it's the opposite and so help us shift our mindset. Like, what makes you think that this time is special for new business owners who are looking to really jump in?
- [16:33]
A
Yeah, it's such a great point. So a couple different reasons. One is I actually think it's never been harder to start and sustain a profitable business. The data seems to show that we have started more businesses since 2020 than we have in like the prior 20 years. Previously we have a massive now a lot of that was a Covid spike, but we have a massive uptick in brand new entities structures, quote unquote, businesses that have started. The problem is that most of those businesses do not become profitable. They never actually make any real money, and they certainly never actually drive real profit. And so there's like this profitability crisis. Which is the real reason we build businesses is so that we can take home more and have a better life. Now what's interesting to counteract that is that we are sitting right now at what I call the intersection, the three waves. So right now around us, we don't even maybe realize it, but we have the baby boomer generation retiring, which is called the great retirement, right? So we've got, for the first time ever, we've got the largest population in the US and around the world of owners. So 60% of all small businesses are owned by baby boomers. Coming out of the workforce, they're ready. In tandem with that, we have a generation of youth who don't want to take over their parents businesses. So what's happening is we have a supply and demand cris, right? We've got all these businesses coming online. Baby boomers don't know how to sell their business. They don't know how to value their business. They're not even sure they think about it as a business. They think about it as a job. And then simultaneously we've got this youth who has had the great resignation, quiet, quitting, wage stagnation. They're making for the first time ever in American history, a 30 year old today is making less than their 30 year old parent was when they were their age for the first time ever. And so this young generation is mad, this old generation is tired. And so what have they been doing? They've been kind of beaten up on each other. Right? You know, the baby boomers are like, get it together you lazy little gremlins. And the young people are like, you sucked up all the resources, you know, we got nothing. And I think that's wrong. And that is like somebody shaking a jar full of ants. And instead we have an opportunity to take over the older generations businesses and jobs. And why that's interesting is because you know this, as a business owner, most business owners have 90% of their net worth tied up in their business. So if you're like, I'm a millionaire, well, how are we measuring that? You have a business that does a million dollars a year. Okay, well the average business has a 15% profit margin. So that means you make $150,000 a year with a million dollar a year business. Well, after taxes and everything else, you know, how much are you actually taking home? A lot of the money in entrepreneurship is made on the sale. And so if you as the new young gun can come in, and I don't even mean young like you're in your 20s. I just mean the young generation of entrepreneurs. You could be a 60 year old employee for the first time becoming an entrepreneur. If you're able to take over somebody's business and pay them out of future earnings of the business, you've just given somebody a retirement in a world in which a lot of them do not have 401ks. And so this to me is an opportunity that I don't think we're ever going to have again in our lifetimes.
- [19:50]
B
You know, running a business is a lot like growing a garden, which is something I am obsessed with. You start with an idea, you nurture it and before you know it, things are growing and fast. But here's the thing. Just like any garden, running a business has its weeds. The payroll, the hr, the paperwork. And that's why I have to tell you about a move we just made in my own business in spring. Switching to Gusto Gusto takes a hassle out of payroll and hr. They're like that expert gardener who steps into weed water and makes sure everything's blooming just right. Like imagine having all of your payroll taxes filed automatically onboarding a breeze and benefits that work with your budget because Gusto makes all of that possible. Plus, they genuinely care about small businesses like yours and mine. I mean, it's no wonder Gusto is rated the number one payroll product for small businesses. Four out of five employers say Gusto helped them stay compliant with federal and state regulations. And with Gusto, simple guided software and user friendly interface, payroll and HR are no longer exhausting. They're rewarding. Do you want all of this and more with no hidden fees? Try it out for three months free@gusto.com gold digger that's gusto.com gold digger let's talk about something I think most of us can relate to, which is last Minute Card Panic. It's a holiday season and instead of scrambling to find stamps or digging through those generic store bought cards, you can actually be ahead of the game for once. That's what Moonpig is all about. Moonpig lets you create the most thoughtful, personalized cards you can add your favorite family photos, write something that'll make your loved one smile, laugh, or even tear up a little. And they'll even give you a nudge if you need some inspiration for exactly what to say. And here's the real magic. Get this Moonpig mails the cards for you. No stamps. No late night trips to the post office. Just you on the couch with your cozy blanket making holiday magic. Think about how much joy you can spread this year. Whether it's Grandma getting that sweet family portrait or a friend unwrapping a gift card that you've slipped inside the holiday card itself. It's so easy to add that personal touch. And with Moonpig, you can send cards to everyone on your list in a few clicks so you you never forget anyone again. It'll make you love sending cards all over again. And because I want for you to try it too, your first card is absolutely free. Just head to moonpig.com US Gold Digger again, that's moonpig.com US Gold digger go make someone's day. Everyone deserves a Moon Pig card. Love, love love that explanation. And I also just think too, like, what a gift you could actually give to someone who has literally spe their life building this business with no exit strategy. Like, I can literally think of businesses in our small town that you just described exactly what's happening. Okay, so can you walk me through? Like, let's pretend like you and I are browsing Zillow. Okay. Cody and I are sitting together. I mean, you literally created something just like this to browse businesses. Walk me through, let's say, like, three examples of businesses that, that I could buy. And I'm going to play devil's advocate because I know our listeners are going to be like, what are you guys talking about? And so pretend like we're touring homes, but really we're looking at buying businesses. And walk me through how you're evaluating companies or businesses that you would actually want to buy or that would make sense to somebody listening to the show.
- [23:18]
A
I love this. Let's come up with, like a business I would never buy. You can see if you can guess which one. A business that I really like and then a business that could be right for the right person. So let's do it. Okay, so the first business. This is on a site called Biz Scout. We actually. I try to practice what I preach. So we bought this business and now we're growing it. So basically, this first business is a restaurant. It's located in Texas. The restaurant has been around for seven years, does about $450,000 in total revenue with about $120,000 in profit. And it's located in fast convenience. Now, is this a business just with those numbers? What do you think? Do they like this guy or not?
- [23:59]
B
I don't think so. The margins are so small.
- [24:01]
A
I like it. Okay, so she goes, one, I don't love the margins because why? Because Jenna's a pro and she knows that online businesses make a lot of money too. Great margins and gotta cook nothing. And so you're right. This is actually my least favorite business. 3 I'm gonna show you. And now it's. It's that the margins are low, but for the right person, that might be okay. The real reason I don't love this business is because the restaurant is what I call a lot level one business. It's a lower level business. It's hard to make a lot of money in a restaurant like you. Really, unless you're going to create a restaurant group empire, it's going to be hard for you to do 10, 20, lots of millions of dollars in revenue. And so there's not a lot of upside. Plus, you have a lot of complexity in the business. The average restaurant costs somewhere between 200 to a million dollars to build out or start. The average restaurant also only lasts for about two years. It's what's called a red ocean as opposed to blue ocean. There's a lot of them, there's a lot of options. And then simultaneously, you have to be a really good operator because your inventory dies every couple days, right? So you know, you can have an online course or an email list for, I don't know, years, decades, the same thing stays. It doesn't somehow decay. And so a restaurant, you got to go out and figure out how to sell the three day old shrimp right now. So for that reason, it's not my favorite business. Now here's one of the good parts about the restaurant business. With $150,000 in profit, if these numbers are correct, and we'd want to double check and make sure that's true, if you had a $150,000 online business, you might be able to sell that thing for like 5, 6, 7x. You know, you might be able to actually drive 700amillion, 1.2 million if you sold, sold a business that was making you $150,000 a year on the Internet. Now, the cool thing about restaurants is they sell for about 2 to 3x. And in this case, this one's only selling for 1.5x. So that means $300,000, including the lease, including all the equipment, and including the revenue and profits of this business. So it's a little bit hard. I don't love the restaurant business overall, but they're much cheaper to buy. It's like just lower valuation. So that's one business. The other thing that I would think about a lot, we have something in the book. It's called the perfect fit business. It's like imagine three circles overlapping into a Venn diagram. And in the middle of the three circles is your perfect fit business. And I want to mix not your passion, but things you're obsessed with. Like, man, I love food. Man, I love growth. Man, I love sales. Plus your skills. I'm actually really good at Extra XYZ and then your network. I have a bunch of clients that I could sell this to. I have a bunch of attorneys that I could hire if I'm going to do a law firm, whatever. So if I am currently a chef in a restaurant, and I love the restaurant game, and I know the restaurant game pretty well and I see this Business. This might be an okay business for me. So that's one way to think about it. Let's do a second business really quick. So this second business does about $700,000 a year in revenue. This business does about $300,000 in profit, which is interesting. And the business is getting sold, which I should have told you the last time, for about 3x its profit. Now this business is interesting because it is actually a trash compacting and removal business. What do you think? Do you think I like this one?
- [27:30]
B
I mean, that seems like a decent deal. It seems like you can make back your investment and depending on the business model, you could scale it. Does it overlap with your passions? I'm not sure, but we can talk.
- [27:43]
A
Okay. I like it. So you're thinking. So you're kind of starting to see the same thing. You're like, huh, the margin's a little bit higher here. I don't have as much complex inventory. Right. I don't have to sell a $10 restaurant like plate in order to make up my $450,000 in revenue. I probably have to sell like $500 or $1,000 service. So that's a little bit more. I don't need the volume. I don't need the total number of clients. And also, man, with between my, you know, tree trimmings every year and, you know, all the construction happening in my neighborhood, I would pay for somebody to come up and pick up my trash with consistency. And if they compacted it all, I bet they have cheaper margins than just somebody who straight up picks up stuff. Stuff and takes it to the dump. That's kind of interesting business. Okay, maybe there's something there. Plus, I might go, oh, I could think of some fun marketing stuff for that. Like, I could picture it, right? So even if I'm not into, like, I don't know if I look like this, but, like, my hobby is not necessarily trash competitive. Not like the top of my list. But I could kind of get into the idea of like, huh, could we do TikTok videos where it's like, watch me crush this shit? You know, and it's like, you know, we're just, we're just crushing, crushing stuff. You know, could I, could I be at the local school fair giving away, like, you know, decide if you want to crush a bunch of this stuff? And also there's like signage here, and so the parents get to see that there's a trash compactor and collection company to buy anyway. I could have fun with the marketing. And so that business I actually think is really interesting. Plus to your point, if you got the marketing right, it's a service based business. You don't have a lot of operating costs, you don't have a big restaurant with people in it all the time. You got a few employees. It's what I call a gateway drug business. A little bit more simplistic and you could probably scale it out with a bunch of people without having to have really high level operators, chefs, people you got to bother.
- [29:36]
B
Okay, so if you're new business, if you bought this, is this business like, let's say you're buying this business, is it still operating where you're buying it from or are you buying it and bringing it to you?
- [29:47]
A
Oh yeah, good question. Yeah, no, I like to buy businesses that are by me operated, have an operator or general manager inside of those businesses. And also I don't want to assume that I'm going to go on and make a million changes. I know that like I'm pretty good at marketing and distribution and leads so I probably want to come in and get them more leads. But I probably don't want to buy a business where I'm like, well, we've got to change the machines out. I don't know about that. And so yes, you want to kind of have what I think about and talk a lot about in the book is like, where's your unfair advantage? Where you can bet on realities, not hopes and dreams, current profits, not potential revenue. But so like for instance, the third business that I was going to tell you is like, I do love candles. I feel like this is like I love a candle. And so I was like, what about an Etsy business? So this one's a candle manufacturing business and this one's kind of interesting. This is called off market deal searching, which is one way we tell people to go find a deal. Bizcout has this thing where you can, you can look for off market businesses, businesses that aren't listed for sale yet, just like off market real estate. And in this particular instance, this is a candle company that does specialty holiday candles. And what's interesting here to me is it looks like they have like they've done about 11,000 sales on Etsy. You can see how many sales they've done on there right at the top. Plus you can see if you look quickly at their product set what the average cost of each candle is. So what have you just done there? You've just reversed and engineered how much revenue that company has by looking at two numbers. And so really quickly. I'm like, okay, 11,000 offers, let's make it really. Or 11,000 sales, let's make it really easy and say it's a dollar. They've done $11,000 in sales, maybe at the lowest level. Now, maybe that doesn't include multiple things in the cart. Could. Could not. And this business, I might go, God, I really like this business because I have an online platform. I'm not going to sell trash compacting, probably on my online platform, but I bet I could sell candles. I bet I could sell, like custom candles created by somebody else and sold. And so instead of doing a partnership, one off thing, what if I reach out to some of these companies and say, hey, could I own a part of your candle company? And not only can I own a part of it, but why don't I help you grow it? Now, I don't have a lot of money to give you, but I have some audience. So what if I take. If you do $11,000 a year? Again, we're simplifying. What if I can double that 11,000. What if I could give you $22,000 a year by helping you get in front of 11,000 new customers? Could I take. Then I've doubled your business, right? Can I take 25% of your company if I double your business? I won't take one thing if I don't double your business, but if I do, I want 25% and I want the cash flow that comes with that 25%. If I'm a small business owner, maybe you're not going to say yes right away because you don't know me, but if I get to know you and I show my value, I might do that deal.
- [32:52]
B
It's time to turn that big, bold idea of yours into a business. You've got the creativity, the hustle, and the passion, but there's one tool that takes it from a great idea to a thriving shop, and that's Shopify. Shopify makes it ridiculously easy to transform your dream into an online store that actually sells. Whether it's a product, a service, or a membership, Shopify's platform offers the world's number one checkout, which means more sales and fewer abandoned carts. And with shop pay, you can boost conversion rates by up to 50%. That's more cha Ching moments. Think about the small brands out there, absolutely crushing it. The secret behind so many of them is Shopify helps you sell online, in person and everywhere in between. So your shop is thriving wherever your customers are. Businesses that sell more sell on. Shopify Sign up for your $1 per month trial period at shopify.com gold digger all lowercase. Go to shopify.com gold digger to upgrade your selling today. Shopify.com gold digger it's like Shark Tank Cody. This is like I literally, the other day I was sitting down and my almost 6 year old came and sat next to me and Shark Tank was on. And we don't watch a ton of tv. And I was like, I want you to just watch 10 minutes and see how somebody's presenting and just kind of see if you kind of understand what's happening here. And she freaking loved it. And she's like, can we watch another one? Can we watch another one? Did they get the deal? Did she take the deal? Why is this person sad? Why is it. And it was like, it was insane. But I mean, like, this is like Shark Tank. And what's interesting is, is that I am sure a lot of people listening to this show. I feel like this model that you just described is probably the most valuable in terms of my listeners. Because my listeners are gifted people, right? They see things, they know how to do things, they study things. We have all experienced different businesses that they're really good at the thing that they do, but they suck at all the other stuff, right? Like even in building our home, like we got this beautiful custom railing. And like the guy has no assistant, he has no invoicing system. Like, he's literally using a whiteboard in his garage to keep track of customers. And you recognize, like there are so many entrepreneurs out there like that where my audience could swoop in and help save them or teach them or get more clients or get more revenue. And you're saying, don't do it for an hourly base, don't do it for a commission, do it for a percentage. This is interesting.
- [35:26]
A
A hundred percent. And if you want to get, you know, real smart and do what the very, very rich deal, I talk about this, I think it's in the fourth chapter of the book is thinking about distributing equity. It's called. So basically instead of just saying, hey, I want a percentage of your company when one day you eventually sell, which is what Shark Tank typically does. Not all the time. They do some royalty stuff too. The pros, what they would do is they would go, listen, railing company, your candle company is probably not going to be a publicly listed company, right? This is what's called a lifestyle business. So because of that, I actually want each month or each quarter, I want a percentage of net revenue. So, you know, the Total revenue in the business, I might want a percentage of profits. So if I'm a little bit more giving, I might say I only want a percentage of the profits based on how much equity I own.
- [36:17]
B
Yeah.
- [36:18]
A
And so then you get paid to wait. And so what I like to tell people here is, like, you could go through your whole life learning dropshipping or, you know, I don't know, real estate or multifamily or whatever. You could go and do all these different things, or you can learn the language of money. And the language of money is deals. Whether you are doing a negotiation of salary, whether you are doing a prenup with your partner, whether you are doing a purchase of a small business or a real estate transaction, it's all the same language. And that is the language they never taught us, that I learned on Wall street that I put in this book, because I was like, listen, my vehicle is small business. Because I think there's a unique opportunity there. And it's important to me for the country that we own our small businesses. But, you know, if I could go talk to more humans, I would just say learn deal making, not negotiation. That's something different. But if you learn deal making, which is how to get more ownership in things based on the value that you bring, you will live your life with a lot more wealth than the average American will.
- [37:21]
B
I have to tell you a quick story, because the whole deal making, it's so interesting. I had it modeled very young, but when I was growing up, I was a gymnast, and my parents couldn't afford to pay the tuition of the private gym that I really wanted to go to. And my mom was a nursing instructor. My dad worked at a paper mill. And they never told me, like, no, you can't do this because we can't afford it. Right? They were like, we'll figure it out. And my mom, one day, she was sitting, watching me upstairs, watching me on the floor down there. And she looked around and she's like, oh, there's this, like, weird kitchen in the gym that totally needs renovations. And my dad was always super handy. So she went to the owner of the gym, and she said, if we renovate the kitchen for you, can Jenna go for free? And they did this over and over and over again. They found more opportunities. We redid the locker room, we redid the bathroom, we redid the kids gym. We. And every year for one week, my whole family, my grandparents and everyone would show up and we'd work at the gym and we'd do the deal. So that I could keep doing gymnastics. And so I was literally just thinking about that the other night of just, like, how when you can find the places that you add value and you can present them in a way that is valuable, people would be crazy to say no. Like, the gym owner was already overwhelmed in coaching. He wasn't even thinking about the cabinets that could use a paint job. Right. And so it's just awesome to think about. Like, there are so many people listening right now that don't even know what value they can add because they've never really asked themselves that question. And it's like, there are so many opportunities out there for you to bring the value.
- [38:59]
A
Such a good point. It's actually something I kind of obsess on a little bit overall. And I'm. I'm narrowing down exactly how we could say it, but, yeah, you know, how could you expect your bank account to grow if you don't actually know how valuable you are? And most of us have no idea what value we bring to a company monetarily.
- [39:18]
B
Yes.
- [39:18]
A
And I think, you know, people have a lot of issues with money. And I remember I was like this too. And I think, here's why. If you ever feel like you are less than because you don't have enough money, you shouldn't feel bad about that. That's normal. Here's why. Because the word is very straightforward. It's net worth. It is saying your worth is worth net less than mine. If my income or bank account is better than yours, then I don't think our net worth has anything to do with our worth as a human whatsoever. It actually just means that somebody else has figured out how to drive more value in the world than you have monetarily, and that they know how valuable they are for whatever their skill set is. And that's another thing we were just never taught. I mean, think about it. Like, when we were young and we were looking for a job, don't you remember being like, I don't know how much money to ask for? Yeah. What is that?
- [40:07]
B
Yeah, yeah. You know, we never negotiated anything. We're like, I'll take what you give me.
- [40:13]
A
Right. And now what do we do? We go, well, what's the market comp. Just like real estate. It's like, what's that house versus that house? It's like, what? That's that human worth versus that human worth in this role. But even one step further than that would be better, would be like to say, okay, I want to understand how what I do for a living makes Money for people.
- [40:32]
B
Yeah.
- [40:32]
A
Like, and then how, if I do X more of this thing, do they make more money? If I do less of it, do they make less money? And if we can triangulate our values, our skills set based on that, then I think we can also make a lot more money. So it's something I've been thinking about a lot. We talk about it, and there's this. There's a section on expertise to equity.
- [40:50]
B
Yeah.
- [40:50]
A
Which is how do you use your skill set to get more equity in a business? Not just distribution, but, you know, you could also say, for instance, like, let's take your railing company, guy. You could be like, huh, I have a bunch of buddies that also want railings done on their house. They love my new house. Your house is beautiful. So they're like, I want Jenna's house. House. Okay, well, maybe Jenna wants a new portion of the house. Or Jenna wants a little cut of this business, but you don't want to pay for it.
- [41:15]
B
Yeah.
- [41:15]
A
What would you do? You'd go, hey, guy, I have three friends that want to do projects with you. Let's go over there and see what those projects are worth. 50k.
- [41:24]
B
50K.
- [41:25]
A
50K. Okay, cool. If that's the case, how much revenue do you do per year? Huh? I don't know, 200k. All right, well, we've just almost doubled your business. If I give you this additional one, can I get a cut of the business that's increasing the bottom line of a business? But you could also say, Mr. Business Owner. Man, you tired? You've been busy. You guys are slammed. What's happening? Like, how do you run this thing? You run it by yourself?
- [41:49]
B
Whoa.
- [41:49]
A
Are you kidding me? Like, what's your capacity? You're too busy to even do more deals. No way to do it, huh? What would it be worth if I helped you increase your capacity and decrease your pain? What would that be worth to you? Oh, maybe. Maybe part of the business. Well, let me help you hire a va. Yep. Let me give you a couple systems and processes, and now you can make 30% more money. Maybe that takes some setting one of that business. Then the last way would be like, huh, I can't make you more money. I don't know how to decrease your pain. But I'm pretty good at cutting costs. Like, my mom's like this, for instance. We always joke with her that I have, like, PTSD from her checking my Chase Banking account frequently to see if I had, like, overdraft fees or something like that. Yeah. And so she's amazing. She's the bulldog dog at saving cash.
- [42:31]
B
So is my mom.
- [42:31]
A
And so what if somebody came to you, Jen? I mean, I'm trying to hire this person right now. I'm trying to hire, it's called an FP and a, a financial planning and analysis person, basically a glorified accountant for my business. But all I want them to do is look at a couple businesses and say, where are we overspending and where can we cut costs? And I think that if somebody came to me and said, hey, I'm going to look across your business, I'm going to present out a plan to cut your business business by X amount of costs. Could I keep, yeah, 20 of what I cut for you? And if I continue to do that each year, could I keep some of it? And the answer would be yes.
- [43:08]
B
Isn't that, I mean, okay, I think I love this in so many ways. And I also just think too, you bring up such a valid point of like, so many women don't know what they're worth. And therefore too, it's translated into starting businesses and not charging what they're worth worth or not even being willing to like, say, no, this is what my cost is. And so I can see this coming through in so many different ways that are so relatable where it's like, I love the reverse engineering. I think that I got to where I am today because I'm so good at reverse engineering. Basically anything. When I was a photographer, I could look at a pose in a, in a magazine and figure out exactly the lighting and how they did that. When I built my business, I could look at other people's businesses and go all the way back to step one. And I was willing to do step one to step 30. Right. And I think that so many people don't even start with what value do I add or what am I adding to this company? And then how can I, like, take that concentrated effort? What would it look like if I only put my time into that, that adding that value either for myself or for somebody else? So I think this is, I mean, I think you're onto something. Here's what my question is. How many companies do you own a bit of? What, what are we talking, like 20, 30? Where are you at with this?
- [44:22]
A
Yeah, well, companies that we own a big chunk of, what I would call like major investments, majority investments, meaningful investments. 26. Wow. We own more than 50 companies that we own a small part of.
- [44:35]
B
Yeah.
- [44:35]
A
But sometimes I'm careful about saying that stuff because when I was just starting out. It's like. That seems like a lot. Yeah, that seems overwhelming. And to be fair, I don't think everybody should do that because what do you know for sure when you have 50 companies? Yeah, something's going wrong. Some point right now, somebody's losing me money. Yeah, right now. And so. So I don't think everybody needs to do that, but I do think that more people than realize need to get ownership in something so that if something happens to them, they can't work or they don't want to work anymore. You have some upside and that doesn't have to mean that you become an entrepreneur. You know, for instance, a lot of those deals, I'm just an investor in the deals, but I have distributed equity so I can make some money on it. For a lot of those companies, I'm just lead gen for them. So I take some money when we drive stuff from them. So I think there's plenty of ways to skin the business ownership cat. But at this point, my idea is really I want to create a multibillion dollar empire of businesses that helps people buy businesses, scale businesses, invest in small businesses businesses, and eventually exit them to other people who want to be the next stage for them. And, and I want to do it in a distributed way. So like a lot of people ask me, and I'm sure they ask you to like, hey, you're doing so great on your email list. You're doing so great on buying businesses. Cody, why are you teaching other people? Yeah, and there's multiple answers to that. But first is because I don't think that I should own everything. I don't think anybody should. Only 6% of Americans own a small business business. 6%. We started out where you couldn't even vote if you didn't own land. And now we have basically given up our ownership. And I think that's wrong. And second is because, you know, as you play this game of building businesses, it gets lonely, man. It's tough. And I don't think there's enough, there's not enough ways for us to come together and do this very hard but very worthy thing, which is be in charge. And so, you know, can you imagine just like giving up all decision making for your kids? Like you would never do it.
- [46:43]
B
No.
- [46:43]
A
In fact, I know you. You're like, I'm taking it more like, don't even talk to my kids. And so. And yet with our careers and our finances, we just give up ownership to somebody else. And, and I don't think that works out for us long term. And we've seen the consequences of it with more Americans and people around the world not having the financial life that they want. And instead we have this massive concentration of wealth, not because rich people are greedy, but because we have bad instead of alignments and we're not taking enough risks as a society ourselves. When I learned one of my favorite things from my mentor, one of my favorite mentors, who's a billionaire now. And I don't say that like I bring up billionaires often, because when you meet them, they think different. Their brain is wired differently when it comes to money. They've totally reprogrammed themselves. And I remember one of them said to me when I was first meeting with him, you cannot spell rich without risk. And that really stuck with me.
- [47:42]
B
How did you write your book and tell everyone where they can go get it and why they should pick it up? You've already made a very strong case for mainstream millionaire. But tell us why to go get it. Everyone go grab a copy. We should do a book club on this because then we're all going to be buying up businesses over here.
- [48:00]
A
Oh, that'd be fun. I love it. Yeah, buy them up. Sell them to me after you scale them. I'm totally into this deal. So the book is called Main Street Millionaire. You can get it@msmbook.com or codysanchez.com and, you know, I started writing this book, like, forever ago because I was writing processes for a team on how to acquire a business. And so basically I was starting to write out, hey, you know, I'm not involved in every aspect of the process now. I'm busy doing important things like ticky talkies. And so I was like, somebody else has to be able to run this transaction. So I started outlining our entire process, and then at one point I put it into our community. So I was like, okay, let's stress test this with like 3000 people and see what am I missing because I'm too close with it. I have what's called unconscious competence now. So it's like when, you know, you forget all the things that you know about doing a deal. So I was like, let's stress test this past. Like, people have never done a deal before. So we did that. And then over the last two years, I worked with this guy by the name of Charlie, who's the man, and we whittled it down to, like, what I thought could be the most simplistic version with exactly what you need to buy a business and kind of Nothing that you don't. And so we did that over the course of the past couple years. And the idea was simply, I don't. Especially in this world today, like, nobody's coming to save us.
- [49:16]
B
Yes.
- [49:16]
A
It's kind of up to us whether we like it or not. And so the idea was, if I could leave one thing of the very limited things I'm good at, it would be this. It would be like, how do you buy a business? And really for this idea of ownership, how do you get ownership in your country? And so that's what we're doing. And I'm kind of obsessed with how can we get more humans to take a little bit of risk on themselves. And the last thing I'll say is I have this mentor, his name's Bill Perkins. He wrote the book Die with Zero. Do you know that book? It's a great book.
- [49:44]
B
Yeah.
- [49:44]
A
So Bill's the man. We were talking the other day and he said something that I was like, oh God, it's so true. Like, I think especially for women, we are, we are risk focused because we have to protect little tiny kamikazes at all time, right. That are just constantly trying to murder themselves. So we have to be risk focused. Men, by and large are the ones that go out and they're more focused on adventure and robotics reward and not as much downside protection. And I realized talking to Bill the other day, he's like, listen, today we have, more than anything else, we have a lot of ego risk. So like Cody, if I failed at everything today, if I lost it all, would I starve? Would I go homeless? Would I die? Probably not. Like, I think that's very highly unlikely. I mean, less than 1% likely. I mean, my family would take care of me, friends would take care of me. I would be able to go get a job as a waiter or a bartender. Like, I have enough skills where really total annihilation risk. Zero.
- [50:43]
B
Yeah.
- [50:43]
A
Most of us in the US have zero annihilation risk, which is crazy. So what does that mean? That means that all the risk is in here. And it's that our ego is like, I don't want to go backwards. I'm playing this relative value game for somebody else. I'm here, I don't want to go go down. That's scary. And it is for that single reason that we never really go up. And. And so he reframed my mind often by saying, you know, have you been around small business for so long that small has infected your thinking? And I think about that every time. I don't want to do the scary thing.
- [51:19]
B
That is so good. Cody, will you come back on the show sometime? I feel like we're only skimming the surface here.
- [51:27]
A
Of course. Always for you. And you got to teach me all the things about motherhood as we get into that journey.
- [51:33]
B
All of the things. I am so excited to watch you get this book out into the world and then hopefully some babies, too. And I'm here for every step of it. Thank you so much for coming on and sharing and just sharing something that I think a lot of us haven't even considered or thought about and opening our eyes and planting the seed today. So thank you so much for coming on the show.
- [51:55]
A
You're the best. Thank you for having me and you guys. Tell me if you buy a business. Yes, tell me on Instagram.
- [52:02]
B
I've met a lot of amazing entrepreneurs. I've never met someone like Cody. The first time that I met her in real life last year, I was just blown away by her, her energy, her way of thinking. And today's episode, to me is so inspiring and exciting. And it also just encourages us to figure out where and how we add value into the world, into other people's lives, and potentially into other people's businesses while getting a share of their success. I love today's episode. I hope you love it too. Go grab Main Street Millionaire Cody's new book. Check it out. It is the cheapest way to learn from an expert just like her. And of course, thank you so much for listening to the Gold Digger Podcast. Until next time, keep on digging your biggest goals. Thanks for pulling up a seat for another episode of the Gold Digger Podcast. I hope today's episode fueled you with inspiration, gave you information that you can turn into action, and realigned you with your true north in life and business. If you've enjoyed today's episode, head on over to gold diggerpodcast.com for today's show, notes, discount codes for our sponsors, freebies to fuel your results, and so much more. And if you haven't yet, make sure you're subscribed so that you never miss a future show. We'll see you next time. Gold Diggers.