Posts in category: LIFESTYLE

Hey Contrarians,

Most people think having a job is safer than starting a company.

They’re wrong.

Today’s story is courtesy of companies who don’t really care about you – and your burning desire to start creating your own freedom.

Today in 10 minutes or less, you’ll learn:

✔️ Contrarian framework: Comfort vs Safety

✔️ How he went from $0 to $300k in 2 years

✔️ 10 biz’s I’d start tomorrow if I were laid off

✔️ How I’d scale to 6 figures in 90 days

✔️ Why I love home service businesses

CONTRARIAN FRAMEWORK: COMFORT VS SAFETY

Who remembers the top headlines from last year? I’ll jog your memory.

First, the Roe v Wade fallout. Then, Elon came along trolling the entire internet with his $44B joke. That Johnny Depp, Amber Heard fiasco happened somewhere in there, too.

Oh… And let’s not forget the layoffs.

2022 felt like the year of the layoffs, based on the media around it. But no one seems to be talking about it anymore.

Despite this, layoffs increased by 5x this year.

We’ve been looking at some huge layoff numbers in 2023:

• Amazon: 16,000 roles
• Alphabet: 12,000 roles
• Microsoft: 10,158 roles
• Meta: 10,000 roles
• Lyft: 1,200 roles

The cold, hard truth is this: As long as you have a job, there’s always a chance of getting fired.

Working a job is the comfortable choice. But it’s certainly not the safe one.

If you were fired from your job today, what would you do?

Tough question when you’re not ready. Today, let’s check in with someone who found themselves in a similar spot 6 years ago…

HOW HE WENT FROM $0 TO $300K IN 2 YEARS

Meet Bobby Walker.

In 2017, Bobby was your average Joe. A happy family. Steady paycheck from his security job of 10 years. Settling into a new town.

Life was great… Until the rug was pulled out from under him.

One day, he got a heads up from his friends higher on the corporate food chain that he was being fired.

This post was Bobby’s response to the news:

Bobby needed an income. Fast. And not start-a-SaaS-and-exit-in-12-months fast. I’m talking I-need-grocery-money-tomorrow fast.

He turned to one of the most cashflowing industries of the century – home services. Specifically, window cleaning.

The day after the news about his job, Bobby bought $100 worth of cleaning supplies and launched his window cleaning business.

Day 1? He made $101.

Week 2? He landed a $1,700 gig with his son.

By the end of year 2, Bobby posted again on the Reddit thread. The update? He hit $348,275 in annual revenue.

This got me thinking…

If I were a Bobby, fired from my white-collar job and low on savings, what businesses would I start inside of a week to get some cash flowing into my pocket?

10 BUSINESSES I’D START TOMORROW IF I WERE LAID OFF TODAY

#1 HOUSE CLEANING

​Startup Cost: $134​

Profit Margins: A deep clean costs $200 – $400 on average, at 80% margins.

Pros: High chance of recurring revenue. Most customers will sign up for monthly, biweekly, or even weekly cleans.

Cons: A full-house deep clean takes 8+ hours to complete… And there are only so many hours in a day. You’ll need more than one cleaner to scale past $10k a month.

#2 POOL CARE

​Startup Cost: $181​

Profit Margins: On average, a one-man show can charge $229 per job with 80% as profit.

Pros: Pool owners like the “having a pool” part, not the “learning pool chemistry and cleaning regularly” part. Pools require routine upkeep, so expect a lot of repeat business.

Cons: That said, <8% of American homes have a pool. Not everyone will be your customer, and the few who do may live far from you.

#3 MOBILE DETAILING

​Startup Cost: $220​

Profit Margins: A detailing job costs $100 on average with >80% of that being profit.

Pros: It’s the dream job for people who love being on the move.

Cons: You’ll be going up against car wash chains that have all the bells and whistles.

#4 POWER WASHING

​Startup Cost: $187​

Profit Margins: On average, most biz owners charge $130 – $220 to wash a driveway, or $60 an hour at 80% margins.

Pros: Easy chance for a pivot into commercial properties – residential homes aren’t the only things that need to be washed down.

Cons: Don’t expect the phone to ring as much come winter. (But when the sleigh bells start ringing, you could try…)

#5 SNOW REMOVAL

​Startup Cost: $262​

Profit Margins: You could charge $125 for a parking lot, profits sitting around 80%.

Pros: High recurring revenue.

Cons: Highly seasonal.

#6 HOLIDAY LIGHTING

​Startup Cost: $276​

Profit Margins: Most Christmas light installers charge $425 on average per job with 70+% of that as profit.

Pros: Between the clips, extension cords, and fasteners, this biz has little overhead.

Cons: Holiday lighting season is only two months long.

#7 WINDOW CLEANING

​Startup Cost: $280​

Profit Margins: $50-$75/hr at 90% margins.

Pros: There’s more demand for window cleaners than supply. Not to mention, most customers tend to become regulars (if you do a decent job).

Cons: Not the right biz if you hate heights.

#8 CARPET CLEANING

​Startup Cost: $376​

Profit Margins: On average, most cleaners charge $178 per carpet at 60% margins.

Pros: 48% of all floors in the USA are carpets. If that’s not the definition of plenty of fish in the sea, I don’t know what is.

Cons: Expect to deal with a ton of dust and pollen. This may not the biz to get into if you have asthma or other respiratory problems.

#9 ROOF GUTTER CLEANING

​Startup Cost: $381​

Profit Margins: On average? $150 per gig at 90% margins.

Pros: High demand + recurring revenue.

Cons: A surprisingly dirty job, with lots of climbing involved.

#10 LAWNCARE

​Startup Cost: $628​

Profit Margins: Mowing lawns costs $124 on average at 55+% margins.

Pros: Easy chance to offer add-ons and upsells like tree trimming, weed control, fertilizing, etc.

Cons: Highly competitive.

HOW I’D SCALE TO 6-FIGS IN 90 DAYS

Cool, so you buy a lawn mower, pool net, and a ladder, then the customers come running? Gee, I bet you’ll be a millionaire by Christmas.

Now, remember these are businesses. So let’s throw a little business savvy into the mix. Here’s what I’d do in the first 90 days:

Tactic #1: Lace up your running shoes

Sometimes, the classics work.

First, pick the right neighborhood. You’re on the right track if you’re seeing white picket fences, cul-de-sacs, and 40-year-olds walking labradoodles. If it looks like it could be a Zillow ad, then you’ve hit the jackpot.

Next, break out your Nikes and go for a run. Except you won’t just be doing cardio… You’ll be leaving flyers on doorsteps and lawns.

Let’s say you hit 500 homes. The 80/20 Rule says maybe 100 of the homeowners will read your flyer. And 20 might become customers.

Bobby had a similar strategy where he’d drive through nice neighborhoods, roll down his windows, and throw flyers held together with paper clips onto lawns.

One of those $0.14 “clip flyers” landed him an $8,000 job. You don’t find that kind of ROI anywhere else.

Tactic #2: Strategic partnerships

Do you know the only person more desperate than a recently-fired W2 employee? Real estate agents looking to close a sale.

Open houses need to be picture-perfect… It’s a smart move to look for “For Sale” signs or search online for local realtors in your area.

With the right pitch, you could find yourself a steady stream of homes on the RE market that need maintenance.

Tactic #3: Look out for new faces

“For Sale” aren’t the only signs I’d look out for. I’d also keep my eyes peeled for “Sold.”

New homeowners are also a goldmine when it comes to home service.

Think about it. If you just plopped a few hundred thousand into a house, you’d be willing to spend a few hundred dollars a month to keep it in tip-top shape, right?

My strategy would be to use direct mail marketing tools like PostPilot to send postcards to new homeowners, welcoming them to the neighborhood while throwing in discounts.

Keep this up for a few weeks, then when something needs to be cleaned (and it will), you’ll be top of mind. Everyone loves a familiar face in a strange town.

WHY I LOVE HOME SERVICE BIZ’S

Reason #1: No license needed

Turns out squeegees and pressure washers don’t require a license. (Or degree, or MBA, or 7-stage interview process.)

You can literally wake up one morning, decide to jump on any of these hustles, and have a fully operational biz before noon.

Reason #2: Customers are all around

How many homes do you see with clogged gutters? Greasy windows? Overgrown lawns?

It’s always more than you can count.

These industries are evergreen. Demand never goes away.

With the rise of WFH, people are spending more time than ever at home. (And have less desire than ever to do housework-from-home).

Reason #3: Startup cost + competition

The average data scientist makes $10,233 a month. But that’s after splurging at least $53k and four years on an undergrad degree.

On the flip side, you can start a house cleaning biz for less than $134 and hit $10k MRR with just 25 monthly clients.

Maybe just me, but one of those options seems a lot cheaper and quicker than the other.

Now, you’re probably asking…

“If it’s so easy to start a home service biz, won’t that mean there’s a lot of competition?”

Well, yes… And no. Of course, you won’t be the only business in town. But the others? Most are outdated and run by boomers who set up shop in the 80s and still put “the” in front of Facebook. This is the quality of competition you’ll be up against.

It’s simple, not easy.

Secure, not comfortable.

But at least there’s no such thing as a layoff in the owner’s circle.

I want your work to mean something.

– Codie

📜 Control the terms of your contracts whenever you can. …Wait, not like that.​

💳 Before you click, guess how many $’s of unused giftcards Americans own?

😺 The best biz combines your passions. Yes, even if it’s cars, cats, & La Croix.

⚽ FIFA promised world cup players $30k bonuses. But then said, “Well, kinda.”

🪫 America may have an EV battery boom to rival foreign companies

Ready to become a Contrarian?

There are 2 ways to get in the Crew:

✔️  Small Business Acquisitions Course:  A step-by-step framework on how to build freedom and passive income through SMB acquisitions. It’s like a mini-MBA, but one you’ll actually use (and at 1/100th of the cost!)

✔️  Work closely with us in the Unconventional Acquisitions Mastermind to buy your first, or next, business if you have a minimum of $50k to invest!

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Interested in advertising with Contrarian Thinking?

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Disclaimer – This is the “Be an adult” section. Everything mentioned above isn’t advice, just a recount of what I did. That said: This article is presented for informational purposes only. The opinions stated here are not intended to recommend any investment or provide tax advice. Neither are they an offer to sell or the solicitation of an offer to purchase an interest in any current or future investment vehicle managed or sponsored by Codie Ventures, LLC or its affiliates. All material presented in this newsletter is not to be regarded as investment advice, but for general informational purposes only. Day trading and investing do involve risk, so caution must always be utilized. We cannot guarantee profits or freedom from loss. You assume the entire cost and risk. You are solely responsible for making your own investment decisions. We recommend consulting with a registered investment advisor, broker-dealer, and/or financial advisor. If you choose to invest with or without seeking advice from such an advisor or entity, then any consequences resulting from your investments are your sole responsibility. By reading/sharing this newsletter or consuming our content on our other channels, you are indicating your consent and agreement to our disclaimer.

Hey Contrarians,

I know, I know… Maybe the “scrappy young founders that started it all in a garage” story is a little played out.

My story today follows this script.

But trust me, this one REALLY works.

Like, “became a $2B brand in a little over a decade” works.

Let’s dive in.

Today in 10 minutes or less, you’ll learn:

✔️ Contrarian framework: What are you going to do about it?

✔️ The story of BrewDog

✔️ Weird ways to grow a billion-dollar brand

✔️ 5 lessons from two 9-figure beer fanatics

CONTRARIAN FRAMEWORK: WHAT ARE YOU GOING TO DO ABOUT IT?

Ah, complaining. It’s one of our favorite pastimes as humans.

The idea of openly b*tching about anything and everything with no plan for a solution? Some people live for that stuff. I don’t.

Getting things off your chest feels great. But at the end of every complaint comes the moment of truth. That split-second when you hear this question at the back of your head…

What are you going to do about it?

Most people never answer this question, which is why their complaints never amount to anything more than pointless griping. Let’s take salaries, for example.

​87% of Americans believe they deserve a raise, but only 37% actually ask for one. A bit counterintuitive, eh?

So the next time you’re getting things off your chest, listen for that voice—and answer it.

Life’s more fun as a doer than a talker. Believe me, I’ve met both.

I met one of my new favorite doers earlier this year. He asked me to fly to London to invest combined millions into five British companies where startup cash is tight and government regulations are heavy.

Today, I’d like to tell you his story…

THE STORY OF BREWDOG

BrewDog. A craft beer company that started out in a rundown shed.

It began in 2007 when two Scottish pals, James and Martin, decided they’d had enough of the tasteless legacy beer brands dominating the UK market.

But instead of just talking about the problem, guess what they did?

They rolled up their sleeves and went to work.

They took out a loan, bought some brewing vessels, and began brewing by hand. Whatever few bottles they squeezed out of their makeshift assembly line were sold out of the back of their van at local markets.

Not much, but it was a start.

Fast forward 16 years, and BrewDog is a force to reckon with in the global craft beer scene. How does a biz go from a couple of 24-year-olds making alcohol in their mum’s garage to a $1.95B company?

Well, lock your doors and draw your curtains… You’re about to get their secrets.

WEIRD WAYS TO GROW A BILLION-DOLLAR BRAND

STEP #1: MAKE ADS THAT PISS PEOPLE OFF

We’ve become too okay with safe.

We say safe things, so we’re not held accountable. We keep safe jobs, so we never have to take risks. We do safe marketing, so we make the shareholders happy.

Safe is great sometimes. The problem is – it morphs into monotonous. Vanilla. Conforming.

These days, ads are so guilty of this. Marketing practices are interpreted as hard rules. Regulatory bodies have countless hoops you have to jump through. Suits behind the scenes call the shots. Twitter mobs wait in the wings to crucify your brand for being “offensive.”

But James and Martin said F-that to the rulebooks, the hoops, the suits, and the mobs.

They knew they were in a cutthroat industry. The only way to stand out was to do campaigns no other beer company would.

So that’s exactly what BrewDog did:

From jabs at Putin to sneaking my favorite four-letter word on billboards, BrewDog’s ads deviate from the norm.

In fact, James made sure these ads pissed people off. Because let’s face it, controversy is a $$$ printer.

STEP #2: STAND THE F*CK OUT

Most brands talk a big game about being innovative, but so few actually break the rules.

James said no to any PR that would make a legacy beer brand comfortable.

Here’s what I mean…

Would Heineken’s CEO project a pic of their blurred-out junk onto the House of Parliament?

Would Budweiser rain taxidermied cats stuffed with beer from the sky?

Would RedBull drive a branded tank through the streets of London?

Ok, maybe Red Bull would do that last one. But the fact is, they haven’t yet.

Guess who has?

Many biz owners fall into the trap of, “If you build it, they will come.”

They fine-tune their product, set up shop, and then go stand in the corner of an overcrowded market, thinking the $ will roll right in.

But business doesn’t work that way.

Having a good product isn’t enough to reach success. Sometimes, you have to make some noise, break some rules, stop conforming. After all, there’s more than one way to skin a cat (…too soon?).

STEP #3: RUN A TIGHT SHIP

It’s easy to forget that running a beer company involves more than just brewing beer.

From packaging to advertising, there are a dozen other processes that go into selling a can besides producing the beer itself.

When you’re a small biz operating out of a garage, there’s no harm in outsourcing some of these processes. But once you become a global brand, you’ve got to bring it all in-house.

With 5 breweries across 4 countries, BrewDog has its manufacturing process down to a T… It’s a lot harder for contractors to screw up your brand if you control everything.

But here’s the best part.

For most brands, this influence ends when the product hits the shelf. But with BrewDog, it continues into when and how you drink.

James and Martin wanted their beer to be consumed in only the best atmosphere, so they opened the first BrewDog bar in 2010.

This allowed them to curate the setting in which their beer is drunk, giving them as much control as possible over customer experience.

BrewDog now owns 117 bars in 10 countries.

5 LESSONS FROM TWO 9-FIGURE BEER FANATICS

LESSON #1: SCRAPE OFF THE BARNACLES

When talking with James, I learned he was a crab fisherman for 7 years in the dangerous waters outside of Scotland.

He saw a friend lose an arm. He had to cut a propeller free underwater with no wetsuit, knife held in his teeth. He saw waves the size of buildings pummel his ship as a captain.

He’s seen some sh*t.

There’s some magic in that.

When you can die at work I suppose it makes you realize most of life ain’t that damn hard.

He asked me, “Did you know that boats have to be taken out of the water entirely at least once a year and have all the barnacles chiseled off? If they don’t, the boat will have too much drag and can’t perform.”

Cool? Noted, James.

He chuckled. “Well, most companies are like boats. Barnacle-encrusted, never-cleaned behemoths lugging extra weight. They bolt on more and more people, processes, tasks, to-do’s until they’re drowning in hairy, useless things weighing them down.”

He’s right. So once a year at his company, BrewDog, they analyze everything.

Does it still serve us? Or is it a little crustacean along for a ride?

Hard things, lead to easy…

LESSON #2: REMOVE THE STONES

I asked James the best piece of advice he was ever given.

“It came from Scotland’s first billionaire, Sir Tom Hunter,” he said.

“One day, I was struggling to figure out if I should keep an underperforming manager for another couple months until I could fill his role. Sir Hunter looked at me and said,

“’If you were running a marathon, James, would you wait ’til the 22nd mile to take out a stone in your shoe?’”

Oof. Of course not.

So now, at BrewDog, they say, “You can’t go fast with stones in your shoes.” When you feel them, get rid of them.

It’s the advice that makes too much damn sense that we often ignore, but shouldn’t.

LESSON #3: DON’T SKIMP ON PRODUCT

Millions of people associate beer with “cheap stuff.” It’s the 24-pack at the house party, a tailgating staple, and the broke college student drink of choice.

But you should know that BrewDog makes some of the most expensive beer in the world.

For something as un-fancy as beer, wouldn’t it make sense to produce something so cheap everyone can afford it? Including the broke college kids?

More customers = more cha-ching …Right?

Well, not for James and Martin in craft beer.

You see, one bottle of BrewDog requires 2x more malted barley and 40x more hops than your run-of-the-mill beer. That doesn’t come cheap – and guess who doesn’t like that?

But instead of skimping on production and slashing prices, BrewDog’s founders refuse to bow to pressure. Want to know why?

Because they know that no matter the industry, it’s not the cheap customers you want… It’s those that know and appreciate your value.

LESSON #4: USE OTHER PEOPLE’S MONEY

In 2009, the BrewDog founders needed more capital to scale. So they did the first thing any of us would.

They applied for a bank loan. Guess what? They got rejected.

But instead of licking boots hoping to convince a bunch of suits that they were onto something, they turned to the people who already believed in their brand…

For the first time in 2009, James launched the Equity for Punks crowdfunding campaign. The idea was to turn BrewDog lovers into investors—or “fanvestors” as he calls them.

This was genius for two reasons:

1. BrewDog lovers get paid for their loyalty. If you had bought 1 share of BrewDog equity at £95 back in 2013, you’d be up £37,107 today. That’s enough beer money for half a lifetime.
   ​
2. James raises capital with less resistance than he would elsewhere. Who, besides diehard fans, would fork over £1M in 24 hours? Certainly not any VC I know.

It’s like I always say… Deals become less risky when you do them with other people’s money.

James understands this. That’s why he crowdfunds every year… Even as a $1.95B brand in 2023.

You may not have an army of beer fans throwing money at you but believe me…there’s no shortage of ways to use other people’s $$$ to fund your deals.

Lesson #5: Be weird

BrewDog knew it had a great product. But being good alone isn’t enough to excel in a $117B industry like craft beer.

James knew he had to do weird sh*t to stand out. He had to live and breathe controversy.

In business, no one pays attention to the well-behaved kid who sits quietly in the corner and does as they are told.

Sometimes, it pays to throw out the rule book. To challenge the status quo. To be contrarian.

I want you to be one of the few who do not the many who talk.

– Codie

🧲 How to get strangers to want to buy your stuff: My good bud Alex Hormozi wrote another book! Don’t miss the launch here.

😓 Avg SMB bank loan rate in Q1 = 5-11% (meanwhile, avg profit = 7-20%)

🎫 When productivity-based incentives go terribly wrong… 26,000+ times​

😯 Breaking news: People are happier when they’re self-employed​

🛻 I think we need an official vote. Cybertruck. Really cool or really cringe?

Ready to become a Contrarian?

There are 2 ways to get in the Crew:

✔️  Small Business Acquisitions Course:  A step-by-step framework on how to build freedom and passive income through SMB acquisitions. It’s like a mini-MBA, but one you’ll actually use (and at 1/100th of the cost!)

✔️  Work closely with us in the Unconventional Acquisitions Mastermind to buy your first, or next, business if you have a minimum of $50k to invest!

Did someone forward you this email?

Tell them we appreciate them. Then, get your own free subscription.

Interested in advertising with Contrarian Thinking?

Get in touch with our team. We’re currently booking into Q2.

Disclaimer – This is the “Be an adult” section. Everything mentioned above isn’t advice, just a recount of what I did. That said: This article is presented for informational purposes only. The opinions stated here are not intended to recommend any investment or provide tax advice. Neither are they an offer to sell or the solicitation of an offer to purchase an interest in any current or future investment vehicle managed or sponsored by Codie Ventures, LLC or its affiliates. All material presented in this newsletter is not to be regarded as investment advice, but for general informational purposes only. Day trading and investing do involve risk, so caution must always be utilized. We cannot guarantee profits or freedom from loss. You assume the entire cost and risk. You are solely responsible for making your own investment decisions. We recommend consulting with a registered investment advisor, broker-dealer, and/or financial advisor. If you choose to invest with or without seeking advice from such an advisor or entity, then any consequences resulting from your investments are your sole responsibility. By reading/sharing this newsletter or consuming our content on our other channels, you are indicating your consent and agreement to our disclaimer.

Hey Contrarians,

If you caught last week’s newsletter, then you learned something new about me…

I don’t want you to buy a business.

Not unless you understand what it is you’re getting into.

Not unless you appreciate the masochism of skin in the game.

Not unless you know what you’re doing.

I hear students who go through our education repeat the same sentiment: “I didn’t even know what I didn’t know.”

Today, I want to scratch the surface of what you might not know. And I’m gonna need more than just 10 commandments to do it…

Today in 10 minutes or less, you’ll learn:

✔️ Contrarian framework: The Fourth Path

✔️ The Golden Rule of biz buying

✔️ 20 commandments to not absolutely f*ck up buying a business

CONTRARIAN FRAMEWORK: THE FOURTH PATH

There are 3 traditional paths to making income:

1. Working a job.
2. Investing, usually stocks or real estate.
3. Starting your own company.

There’s a fourth path that’s long been overlooked… And it’s about to explode:

Business acquisitions.

• Acquisitions have a higher success rate than startups.
• The right acquisitions have a much higher cash-on-cash return rate than real estate.
• And acquisitions are still a form of self-employment, which means higher satisfaction, greater income security, and more freedom of time.

Buying a business is the secret Fourth Path to building wealth.

You don’t need to be an elite investor, PE firm, or even an existing business owner to do it. You just need to know what you’re getting into.

So, what does buying a biz even look like?

I have a couple rules you need to follow before you even THINK about your first deal.

THE GOLDEN RULE OF BIZ BUYING

I’m no Sunday School teacher, but I do know that the 10 commandments all get summed up in the golden rule.

There’s also a Golden Rule of Business Buying. It has two parts:

It’s such obvious advice, I hope I haven’t insulted you. Yet so many people make these blatant mistakes.

Here’s how to make sure you don’t…

I compiled a list of rules for your first deals that I like to live by.

(I’ll add to them, too. Email me back anything you think I missed. We are in this together.)

20 COMMANDMENTS TO NOT F*CK UP BUYING A BUSINESS

1. No unprofitable biz’s or turnarounds.

You are not a pro yet.

Once you are a pro, you can buy the ugly house on the block, fix it up, and flip it. For now, you wouldn’t even know how to stucco a kitchen.

So keep it easy for yourself. Buy a nice house in a nice neighborhood (that cashflows), and wait.

2. Don’t do an SBA loan on your first deal.

This is controversial, but for me at least, I would never do a non-recourse, personal-guaranteed loan on my first deals.

Unless you are very rich and can cover the cost of paying it back, have investors who can cover it for you, or have massive cashflow to cover it through salary, etc… I don’t recommend.

There is nothing worse than the weight of debt you cannot repay. As you get more sophisticated, you can do debt well. But in the beginning, be careful.

If you only have $100,000 in the bank but you want to buy a business for $2,000,000 with an SBA loan, that could wipe out every penny you have + your house with a personal guarantee. I wouldn’t do it. Ultimately up to you, but find ways to decrease and diversify risk.

3. Diversify your risk.

You don’t need to take down your whole first deal yourself. Get seller financing, raise from investors, use different types of loans. Do not mortgage your house to buy your first biz.

If you want to do a deal for $200,000 with a business that costs $200,000/year to run, think of it like your savings. I ensure I have enough cash for a 12-month emergency fund in case I make no money during that period. You might want to do the same.

4. Seller financing – do it.

This is harder to get, but it’s also common. Get the seller to take on some risk with you.

What is the likelihood they sell you a business that won’t make any money if you have to pay them back with the profits from that business? Less likely.

What about if you buy the business for “more money” in total valuation but you give them an option to just take the business back at any point if you don’t pay? Worst case, you are out time and the business, but you aren’t out tons of cash and saddled with debt.

5. Revenue and profit share partial deals.

If you’re inexperienced, your first deal maybe even doesn’t have you at the helm. It has you taking down a portion of a deal with sweat equity, special expertise, or something else you bring to the table.

Say you’re in marketing and you want to buy a marketing company. What if instead you:

• Partner with an owner of a business

• Tell them you want to use your skills to increase their revenue by 25%

• IF you do that, you want to be paid 15% of top-line revenue you brought in, plus 15% equity in the business and a right to 15% of the distributions they take annually.

6. Have an exit plan.

How long will it take you to sell this business if you need to? Start knowing who would buy you up early. Ideally, I’d know before buying so if I got in and hated the deal, I’d have someone to flip it to.

If you’re buying a laundromat, who could buy it from you later? What are the laundromat roll-ups? Who else owns one close (but not too close) to yours?

7. Downside scenario planning.

What if your worst year happens this year? Are you still profitable? If not, we pass. What if the sales fall by 50%? Still profitable? If not, we restructure the deal so we don’t lose our shirt.

8. Cash position plan.

Do you know most businesses don’t even know how much cash they have on hand and how long that cash would last if their sales stopped or slowed?

You will not be most people. You’ll know.

You’ll also ask yourself, “Self, do I have enough cash raised, in the business, with investors, or with myself for hard times?” What if you need more cash? You need a plan for how you are going to get it within a 60-day window. Have this and you’ll sleep well.

These are fake numbers, but you should have something like this: weekly revenue, monthly revenue, year-to-date all actuals vs projected. Then at the bottom, what your profit, expenses, margin, account balances, and runway are.

9. Don’t buy a job you’ll hate.

Most of my early deals were too small. Great for not making big mistakes, but not fun for having to run them. It’s a balance.

10. Don’t keep your deal private.

Shortcuts will kill you.

We have group members in our mastermind who did not share the final deal terms and analysis before they bought a business. WHY? Terrible idea.

What often happens: Deals move fast. You get caught up in it, you feel good about it, and it sucks to share your baby and have people call it ugly.

Do the opposite of what feels good. Find a wet blanket friend, have them review, and keep whittling down until even they get on board.

11. No opportunities to lose more than 20%.

I never do a deal that could wipe out more than 20% of my net worth.

These days, that number is more like 5% of my net worth. It just won’t matter. If I lose $100k or $1,000,000 on a deal, I am going to be fine. In the beginning, I would NOT have been fine.

Know your 20% or less number before looking at deals.

12. Careful with franchises.

Franchises play an important role in business-land, but they are usually harder to sell and come with more mandated costs. Be cautious.

13. Valuation of ALL big equipment.

One of the biggest deals I’ve seen go sideways was largely because of one thing. They were a transportation business, and they didn’t get an outside valuation of their most expensive asset: their trucks.

It is very normal pre-sale for people to “band-aid” equipment so that the repairs don’t come out of the P&L and costs. If you’re buying assets, inventory, real estate, etc., please get a valuation or two.

14. Partners: proceed with caution.

Imagine every partner you have will leave you high and dry. It’s certainly happened to me. I didn’t always have a lot of rules for partners, but now I do.

Here are the major two:

• No partners get equity upfront without cash in the game. Never give away equity without a vesting schedule. They need to do the deal with you, put in the same amount of cash as you, AND they need to still vest so they can’t walk away leaving you stuck with the bag.
  ​
• No 50/50 partner. Someone needs to be in control, and it’s probably you. Or whoever has the most skin in the game. You also need to make sure you have a partnership agreement, with clear deliverables on both sides and a pre-set exit provision if it doesn’t work out.

15. Keep your day job.

For your first deal, do me a favor. Keep your day job until you’re sure you really know what you’ve got on your hands. Or one spouse goes to run it while the other gets a paycheck.

Unless you have highly de-risked the business, had success before, have a cash stockpile, or have inside access to the deal, please allow some breathing room.

16. Deals take a year.

Ask anyone who has done one. It’ll take you 3-6 months to close, and then another 6-12 months until it’s motoring. Just like starting a new job, you are on a new venture. Don’t make the mistake of adding before you’re ready.

17. Mitigate “go to zero” risk.

Ask yourself the question, “Could this business go to zero?” Then model out how. Then create a plan for what you’d do to de-risk that.

If you buy a property management company with 30 clients and 20 of them are owned by one group, you could lose all 20 overnight. So what do you do? Decrease the asking price or hold cash in escrow for a year or two in case those 20 leave while you add more.

18. Bring in the expert.

You could build a house with just the internet and your ideas. Or you could find the help of a construction expert or consultant. Which would you choose?

Doing it yourself is cheaper up-front, but my bet is it’s more expensive, time-consuming, heartache-inducing, and full of mistakes long-term. Same with buying a business – get with experts in your industry before you purchase.

19. Financial reporting.

Businesses have to be monitored. You need P&Ls, cashflow statements, and the ability to see into the bank account, always.

I think of it like when you go to the hospital and get hooked up to an EKG, so even if you’re just there for a checkup they know your status. Every business should have this.

20. Don’t fall in love.

In dealmaking, my father told me, “Never fall in love with something that can’t love you back.”

This is the kiss of death. You’re too far into a deal, you really want to close it, the seller knows that, so right before you go to close… He adds more cash he needs. Or tells you the seller financing amount dropped.

Tiny papercuts can bleed you out. Hold the line. There are too many deals to fall in love with one.

So… Are you ready?

– Codie

🎮 When Microsoft buys Activision, Berkshire Hathaway will make $1BILLION​

🤝 Deal structuring: How to buy a $7M business with ~$50k

📈 What do you think triggered the most national debt in the last 120 years?

🥒 $400M: Pickleball players skew old, rich, & willing for elective procedures

🎨 Are you an artist if you use AI? Depends. Are you a chef if you use a microwave?

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Disclaimer – This is the “Be an adult” section. Everything mentioned above isn’t advice, just a recount of what I did. That said: This article is presented for informational purposes only. The opinions stated here are not intended to recommend any investment or provide tax advice. Neither are they an offer to sell or the solicitation of an offer to purchase an interest in any current or future investment vehicle managed or sponsored by Codie Ventures, LLC or its affiliates. All material presented in this newsletter is not to be regarded as investment advice, but for general informational purposes only. Day trading and investing do involve risk, so caution must always be utilized. We cannot guarantee profits or freedom from loss. You assume the entire cost and risk. You are solely responsible for making your own investment decisions. We recommend consulting with a registered investment advisor, broker-dealer, and/or financial advisor. If you choose to invest with or without seeking advice from such an advisor or entity, then any consequences resulting from your investments are your sole responsibility. By reading/sharing this newsletter or consuming our content on our other channels, you are indicating your consent and agreement to our disclaimer.