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Watch these 50 minutes if you want to be a millionaire in 2024

Our communities are under attack we're under attack from the really big and the really centralized no more kfcs no more walmarts i want small businesses if we as a society do not all start buying more of these businesses then who does the biggest players out there and the big boys get richer and the little guys become workers and we become a nation of renters and employees when we started as a nation of owners. Sanchez hello what's going on everybody so there is zero chance i'm gonna have as much energy as that guy so if you guys are expecting that everybody probably should just wrap it up right here we're not gonna we're not gonna make it any further first of all i'm really excited to be here with you second of all i think you all are so smart for being here today because the world okay i'l let that sink in i like that attitude the world for this next year is going to be tough people it's not going to feel like today it's not going to feel like the past year except maybe if you're in crypto i might feel a little bit like that it's not going to feel great 2023 for most people i think for those who are really ready for it. And so that's what we're going to talk about today we're going to talk about buying businesses in a recession we're going to talk about how to buy a business if you've never bought one before we're going to talk about how to buy business with zero dollars we're going to talk about how to buy a business maybe that you already work in and we're going to talk about why right now i think is the best time to be in a choir ever in history that's what we're going to hit on but we're also going to go into something a little bit deeper than the health. And so i want you to just like i want you to get out your pens i want you to get out your pieces of paper because the truth is i'm not here to entertain you today i'm not a dancing bear this is going to be technical there's going to be lots of specifics in what i'm going to talk about and for the people who listen who actually use this coming into the next year i feel very confident saying this is generational wealth creation these are those moments where your kids look back. And they're like thanks. Mom and dad for doing that. But it's going to mean that you all have to really be here with me i thought about what i was going to present out to this crew and ryan's like i got a thousand people who come out to vegas will you help talk to them. And i thought yeah. I could rile them up i could get them excited i could make them feel good about themselves in life or i could make them a lot of money and so today we've chosen violence we chosen a little bit of money today. Okay. So why are we here we're here because you guys are the few who do not the many who speak there's a big difference between the two and we are here to do what i call building a baby berkshire hathaway.


Building a baby berkshire we're going to get our warren buffett on today and so there's going to be two levels to this talk there's a 101 and there's a 202. I want to meet you where you are we're going to talk about how to not just make your next couple zeros but how to build your empire because that's i think the more interesting game in this one life that we get to live let me first tell you maybe why to listen to me for 30 seconds in case you guys don't know me there's plenty of things i don't know much about one thing that i do know a few things about is building a portfolio of businesses we now have a portfolio of businesses that do 50 million dollars a year these are boring unsexy businesses that when i was a kid i certainly never wrote down i wanted to be a car wash owner when i grew up and yet through all my years at goldman sachs and building businesses and doing investment banking it turns out this one skill is the thing that creates more members of the forbes 100 list than anything else and it's acquisitions that's what we're going to break down today the reason we're getting into it is baron rothschild has a famous quote that if you're any wall street or whatsoever you know buy when there's blood in the streets especially if the blood is their own if the blood is your own and the blood in my opinion is coming and it doesn't mean that we have to be predators this can be a win for humans and i'm going to tell you why because 5.1 trillion dollars in small businesses are owned by this one segment of humans. Baby boomers now we tell a lot of jokes about boomers but it turns out that this group of humans is about to transfer more wealth than any generation ever before and we are potentially here to receive it now what happened over these last two years to these boomers well they retired at rates that we've never seen before faster than ever and this is accelerating more regulation getting older getting closer to death thinking about what matters boomers are saying we are passing the baton but most people are not ready for this and that's why we come with this idea that we are here to make massive amounts of money but one thing one thing i want to say to you first is we want to buy businesses especially if anybody here follow me on instagram. Oh no way look at that then you all know especially laundromats how much do i love these things now the reason why i talk about laundromats so much is because they're what i call the gateway drug to business buy-in if you can't understand put in a quarter in a machine in order to wash and dry clothes you probably shouldn't you know you shouldn't buy business. But if you can understand this one thing then you too can acquire businesses it's actually not rocket science it's not easy but it's simple we will get back to me on stage in just a second but first this thing showed up at my house this morning that i gotta show you guys it's this so basically when you're at an event like this the one that i'm at right now with hundreds of people how do you stand out or i don't know if you're like me. But you end up with 472 business cards by the end of a conference and you don't do anything with a single one capture those bad boys in one place better way to network so forget boring business cards all you do is put your card against a phone just like this click on a little profile and all of a sudden i'm gonna remember you plus i can't lose your business card contact info because it's right here just finish setting up my profile took like one second you guys want to know how i actually found out about this company originally my husband we were at an event he met a billionaire casually as one does they wanted to exchange contact information which i thought was wild i'm standing in the background like cheering them on right then he pulls out this card and taps it to the billionaire's phone. And i was like that is such a boss move i should reach out to these guys and they should sponsor my video so thank you guys to ovo for sponsoring this and because i don't do deals unless you get a deal all the contrarians get 10 off so you two can have one of these cards maybe i'l see you with one next time now a lot of people ask me why would you cody theoretically if buying businesses can make you so much money why are you out here on stage why don't you get back home go run around on spreadsheets and buy more of them why tell a thousand people this the reason why is that right now at this moment there's 1 million small businesses for sale in the us they are everywhere on every corner and i would imagine actually let's play a game how many people in here own a business right now raise your hand nice keep your hands up nope give up how many people in your own business how many of you guys would sell your business at the right price and the right terms keep them up. Oh yeah. That's like all of you and so everybody always says to me ah cody there's no deals around. Oh i couldn't find a business. And i go you guys you're in a room full of a thousand people if you can't find a deal here you can't find a deal everywhere anywhere they're all around but bigger than that is my belief in something that our communities are under attack and that you guys are going to be the solution to that and we're under attack from a few different things we're under attack from the really big and the really centralized and my belief as a human not just a business buyer or a private equity buyer is that if we as a society do not all start buying more of these businesses then who does kkr blackstone the biggest players out there and the big boys get richer and the little guys become workers and we become a nation of renters and employees when we started as a nation of owners and that is why i want you so badly to do the thing that we're going to talk about today i want you to see intersections like this and think no more no more kfc's no more walmarts i want small businesses we did a study for thousands of small businesses more hardware stores grocery stores car washes are owned by conglomerates than by locals and guess what does the ceo of amazon ever come to your neighborhood do they care about your corner store. No how about the fact that amazon and walmart own it one in every four grocery stores in the u.s think about that for a second if there's some sort of supply chain issue and it happens at one of those two stores most people can't get their groceries what about not just big businesses but big government. How much easier is it to tax 500 corporations or 5 million small business owners then the sad truth during covid how many of you know somebody who lost a business who closed a business forever because they close their doors once that is coming again then there's another epidemic which is the hiring epidemic i see a lot of male faces in the audience i bet you didn't know this 16.5 percent of all of prime age males are without work right now during the depression 14 you remember those bread lines at the during the depression that we saw in those old photos where nobody could get a job less people working today in that demographic than during the depression and you guys are going to be the answer to that because smbs aren't ready 27 days of cash is what the average smb owner holds at any point in time they are teetering on the brink of bankruptcy almost always and that might be why most more than 60 percent of small businesses had trouble paying their rent sometime in the fourth quarter so this is like you know. Uncle sam you're the answer. Right this is you guys most people come up on stages like this. And they tell you i'm gonna make you rich i'm gonna make you so rich and this is how. And it's gonna be great. And i think it'd be great for you guys to be rich i like that for you rich looks good on you. But i'm actually more interested in what we do with the money than just making it because you get to a certain point you realize it's all a game people told that to me when they were younger. And i was like that's cute i want a bmw then when i got older. I started to realize no it actually is all a game and so we get to choose the game that we're playing and we get to choose if we want to write the rules or let somebody else write them so you guys are going to write the rules now i want to give you some examples of deals because i'm going to get technical this chick might look familiar to you there are deals all around. And i want to give you two flavors of deals we can do one of the first businesses i talked about publicly on the internet was a laundromat i bought for a hundred thousand dollars that did sixty seven thousand dollars in profit now a lot of you guys here are in real estate right who here's in real estate. Yeah a lot how many of you guys make sixty seven thousand dollars off of one house you buy for 100k a year. Oh weird. Yeah not that many. Huh and this is why i like buying businesses because in a world where real estate maybe isn't at the bottom of the trough. Yet you want to wait a minute you buy businesses that offset your revenue and they are all around so i'm going to teach you how to do a deal like this now how many of you have some limiting beliefs in your head like i did when i first started buying a business about why you can't why it won't work i want to plead with you for one thing every time you in your head say something like this won't work for me this can't work not for somebody else maybe you know not for me either i want you to instead flip that and say how could this work for me how because you have two options you can either make money or make excuses i choose the former not the latter and that's what we're going to do today first we're going to kill some of your excuses like let's say you don't have cash is this too soon a little spf me for everybody usually i hear people say something like i don't have cash must be nice cody must be nice for daddy's money how about that rich husband i'm like my dad was an immigrant my husband was in the military have you seen these salaries you think they paid for my acquisitions god the truth of it is you don't need to have cash to do this stuff doesn't make life easier yes do i do way more deals because i have money absolutely but we have something called the get rich tripod what the get rich tripod is if you think about a tripod you have three legs to the stool right those three legs look like this three legs to the tripod we got money we got experience and we got sweat any one of those three legs of the tool you can lean on to do deals here's how they go in order of leverage money is the highest leverage activity you have how much more expensive is an hour of jeff bezos's time than a hundred dollars from jeff bezos infinitely more expensive why because it's a limited commodity but he has lots of cash once you start to get a lot of cash you realize doing cash-based deals is the cheapest thing you can do but when you don't have a lot of cash you use your sweat when you don't have a lot of cash. But maybe you have some expertise use expertise and when you have cash use cash because that's the highest leverage let me give you an example we have a member of one of our groups in unconventional acquisitions her name was amber she worked as a vendor doing graphic design for companies and also prepping them for webinars. Right. So she did the marketing for webinars she made i'm gonna up the numbers but let's say that she was making five thousand dollars a month on retainer for this company she realized though that she was making the company something like a hundred thousand dollars every two months. So what did she do instead she used our get rich tripod to negotiate equity in what's called a sweat equity deal through rev share. And she said business owner that i currently work for skip the 5k a month i don't need it keep it how about instead you give me 25 of every dollar i bring in through for your webinars above the amount that we already make we already make 100k if we only make 100k on it don't worry about it you don't have to pay me anything free work. But if we make 150 000 i want 25 percent of that if we make 200 000 i want 25 percent of that the business owner says that sounds great i got no money down it's only upside for me. She gets the guy to agree. And then she adds the kicker which is really important i want it in perpetuity i wanted in equity as a pro rata which means a percentage of the total revenue of the company that i bring in i want to own equity in that company now amber instead of making five times twelve five thousand times twelve months a year she now has a reoccurring revenue stream five percent of the business and she makes about 250 000 in pure profit to her from no deals that's the power of a sweat equity deal now there's three ways to finance a business everybody in here know what the sba is. Okay we got a few i'm gonna rapid fire through these because what i want to do is i want to plant a seed in your head and then for those of you that actually want the seed to grow you're going to water it you're going to go to contrarian thinking the free newsletter you're going to go down conventional acquisitions the free newsletter. And you're going to learn more. But i want a seed planted and you get to decide if you water it sba small business association that means if i want to buy a business for a hundred thousand dollars how much money will the sba give me for that business do you know ninety thousand give or take if the financials are correct the sba the government will give you a loan for 90 of the purchase price of a business in order to buy it you know how you go to get a mortgage right now for a house. And they go i don't know matt how much money do you make you know what do you weigh now you have to get a colonoscopy. And i guess i'l give you a mortgage right to buy a small business opposite of that they want to know about the businesses financial health so there is a personal guarantee component just like a mortgage but the sba gives you free money i've bought 10 or 12 businesses like that you can have it up to a certain limit that's the first way you get a business without a lot of cash the second way is my favorite i actually taught another guy who was here this week i think pace morby he told me he was going to talk about it this week did he talk to you guys about buying businesses without cash that guy was good i was on one call with that he was scribbling notes i'm like. Hey you know this is good i must be think next thing you text me is like i just bought two businesses not one. I'm like great how much you pay is like zero dollars down. Oh my god it's on brand. Yeah. I believe that so seller financing is basically the seller pays you from the future profits of the business to buy their business and this is when you go what an idiot what idiot would do that for my business why would they pay me to buy their business and that's when i'd tell you sixty percent of all deals done in small business land are done with seller financing 60 percent and on top of that most small businesses imagine this imagine a street in your real estate empire and on that street there are 1 nice houses the houses are cash flowing a year and of those 1 houses only one house will sell in one whole calendar year that'd be weird. Right you would probably want to buy more that's what small businesses are there's so many of them that the demand in elasticity is off and then last is other people's money raising cash this is actually the most expensive way to do it. But it's another avenue for you all right then more sleep then people say something to me like this how many people in here get stressed when they looked at like something like this is a p l or a financial statement does this kind of stress you out you don't love modeling math class was terrible your teacher was a jerk. Yeah me. Too actually fun fact for all of you so i've worked at three asset management businesses i built one to a billion dollars i've done more than a billion dollars in transactions my math teacher when i was in high school told me i kid you not that helen keller had more of a chance at winning an archery contest than i did at succeeding in finance can't make this up like i want to find him mr ross i remember that guy and but let me tell you what when people start to get stressed about financial models and they start stressing about this i say first of all ibankers are largely just on tick tock these days like these guys you should not be intimidated by them second of all i don't use dcf models these are fancy things discounted cash flow models that most investment bankers use i don't use three statement cash flow models i use three things i look at a company's balance sheet i say doesn't make more money than it spends i look at the debt service aka if i have to get a loan can it pay me the profit that i want plus pay off the loan and three i assure i assume no future growth i talk about it like this i buy businesses that are facts not dreams. I don't buy dreams are startups that's great we can play in that lane we have lots of cash we don't play in it now so as long as you can tell yourself that you two only invest based on profitable businesses on the p l you're golden. And then maybe say this is kind of small but let's say that you're like cody i really want to model i'm super stressed there's no way i can do the financial modeling i spent about 500k a year on upwork and sites like upwork where people will charge you a hundred dollars to analyze your business for you in one hour they'l put together a model for you what you want to make sure that you're doing is you're leveraging other people's experiences just like you are today let's say right now you're like i don't know anything about laundromats cody i could never buy one i'd love to have the passive income the quarters i like the asmr of the coins falling into the buckets the whole thing let's just imagine. And they're like but the problem is i don't know anything about laundromats totally stresses me out no way could i own one. And then i go bar is pretty low anybody notice anything there you don't even have to not a spell to own a laundromat apparently this is what we're talking about here the world is so much simpler than people want us to know why two words 2 and 20. In finance every time i do a deal i charge people two percent of the total money that they give me and twenty percent of the profits. So i don't tell people about things because we in finance like to get rich quietly off of everybody else being ignorant i don't think that's that fun all right now say you want to somebody shout out a type of business they want to buy like a sector towing tire repair what else we got laundromat car wash. Okay now here's a super quick hack any type of business that you want to buy i want you to open up twitter i want you to go to the search i want you to type that sector into search and what you're going to find is a bunch of dudes who nobody talks to about a sector that typically nobody cares about you're going to find people like mark. I bought a laundromat from mark fastclamp laundry specialist smb acquisition attorney all he does is talk about buying businesses all day james camp talks about buying websites sam leslie talks about hvac plumbing how many how i mean this these guys are desperate to talk about these kind of businesses and they're all over the place because their wife is tired of hearing about them talk about plumbing you're going to solve their problem by being their resource the second little hack if you don't know a sector and you want to buy in that is called reddit i love reddit if you guys haven't spent any time there it's really where the trolls come out to play now. Reddit it's amazing because look at this i can't remember the exact numbers but like electricians of reddit i think it's like a hundred and twenty thousand electricians on there say you want to buy an electrical company and you don't know if it's a good deal or not do you think you could maybe go to reddit and type in some of the specifics on the company and get an answer for free 9 the answer is yes the goal with all of this is we want to go to the experts and steal their 10 000 hours and that is what i am teaching you guys how to do today now let's say you don't know how to.


Structure deals now you guys are real estate pros. So probably you do but there's really only four things i want you to think about with structuring a deal and actually there's one big huge one over that which is you guys all know this one follow along if you can say it with me you can either have my price and your terms or your terms and my price right my price your terms your terms my price does everybody know that saying if you don't you should which one do you want price terms why because what's your name yell it nick all right nick i want to buy your company for 10 million dollars does that sound good sounds great nick says awesome. I'm about next company how much revenue do you do in your company right now nick he does a million bucks. Okay. Great. I'm gonna buy it for 10 million does that seem like a good deal for nick wrong you wanna know why he didn't ask the terms but he accepted my price and my terms are nick. I'm gonna buy your company for 10 million bucks a dollar a day until i pay off the 10 million do you still want to take my offer. No of course not because nick's not an idiot. He's got a million dollar business this is what i want you guys to think of in real estate land you can't mess with the price and the terms that much right there's a lot that's set imagine buying a business like the wild west very few rules you get to pick so as long as you control the terms you actually control the price four things i want you to know milestones basically means i'm going to buy your business if x for x price i'm going to buy your business for a hundred thousand dollars if you hit a hundred thousand dollars in revenue this year if not i'm going to decrease the price or an ounce i'm gonna buy the business from you for a hundred thousand dollars if you do xyz in the business if you don't decrease the price i'm going to buy your business four hundred thousand dollars if you don't compete with me for the next three to five years if you do i pull back money out of escrow transition periods i'm gonna buy your business for xyz as long as you work inside of the business for the next x amount of time doing x amount of things you guys give yourselves a round of applause you just took a little deal making mba right there all right now you know literally more than 9 of the population on doing deals and on structuring there is a whole universe past that but the biggest problem with most people is they stop too soon you guys aren't going to do that now how do we take this to the next level i would love if you guys did one thing from this event and that is pair up with one other human here one human in this room who no matter what you've agreed to i don't care if you buy a business i don't care if you buy a house i don't care if you buy a mobile i don't care what you do whatever your goals are pick one human who's gonna hold you accountable your likelihood to actually succeed increases by double digit multiples the other two things you need to do deals consistently is somebody to review deals with could be this guy and you do need an attorney and i'm not talking about like. Rocket lawyer. Okay i want you to get an actual attorney. And i want you to negotiate down the price. And i want you to tell them that you're going to pay on a per deal transaction none of this hourly. Okay now you guys are like your own little mini private equity firm the next thing is every time you do deals i want you to picture that little mom and pop again i want you to go back. And i want you to kind of visualize for a moment for me that street we do not take advantage of business sellers why would you when there's so much opportunity the difference between us and private equity is that we live in the communities that we buy so anybody that's in my ecosystem if they're talking about screwing over the little guy they get out i'm not interested in that we play long there we go that's right that's the type of humans you guys are you don't need to be shady you don't need to take advantage you need to negotiate and get the best deal possible.


Long-term people in this industry you will never go hungry so what i would say is that one person that you choose to be with here i want you to make sure that you're pulling the next person up after you do your first deal and then you're pulling the next person up there's a reason i take a phone call with pace morby there's a reason that i teach him to buy a deal even though he could compete with me it's because i believe in that hand up. And i know you guys do too. Okay let's do some examples really quick the way that i found out about buying businesses maybe some of you guys have heard the story before. Is i have an uncle his name is uncle ed. And he actually just passed and uncle ebb he ran a company called ebb homes plumbing they did about five or six million dollars a year in revenue about two to three million dollars in profit he was a sharecropper he had more siblings die than live growing up hard times he built this business up from nothing. And then one day he got that phone call that nobody wants to get with that six-letter word that stops so many families and when he found out he had cancer he didn't know what to do. But he knew he didn't want to keep running the business he wanted to spend time with his loved ones. And so what do you think uncle ebb did with the business that did two to three million dollars a year in profit that he had spent 30 years building shut it down you shut down the business why because he didn't have people like you to buy it he didn't know that this was a world where this was an option he just thought it's a job i stopped doing the job. And it's something that still haunts me to this day and why i still talk to his now widow about it and make sure she's okay how about we break down a deal real quick what do you think about that i'l break down a deal all right this is where we get a little technical i like the pins coming out. This is a real deal all right 332 000 in revenue a hundred and twelve thousand dollars in profit this business was bought for 2x pause on that for a second what is the multiple at which most small businesses are sold does anybody know two to four x nailed it now are there more expensive ones are there cheaper ones of course but if you don't want to get fancy and you don't like those models you say i buy businesses for two to four times the price of the biz i'm sorry the profit of the business. Okay. So they bought it for 2x which means total valuation was 224 thousand dollars they did zero dollars down this is an employee in this business reached out to the owner of the business didn't know the owner was interested in selling the owner was looking for somebody to take over the business happily gave the business to the employee for an annuity over a five-year period the seller financing full amount they make nine thousand dollars in profit minus the seller financing loan payment which means they make about nine thousand dollars a month in profit for no money down these deals happen every day all day and you can do them too how about a big boy let's go from the top to bottom of this 1.5 million 548 000 in profit the monthly payout to the buyer on this 35 000 in profit 188 cash on cash return this one they did put down some cash 164 000. This is for a series of laundromats that they raised from third party the guy was a realtor in california decided to buy these laundromats use zero dollars of his own money and came away with thirty five thousand dollars distributed some of this to the investors too these deals happen every single day now i want to take it to a 202 level can i do that. Okay. So i want to talk about buying businesses. Yes. But then this weird thing happens you guys you buy your first business. And then you're like me you get deals confused because you've done a lot of deals at a certain point. And you buy multiple businesses. And then you create a holding company and then your businesses work for you and you don't work in your business that's where i want you to get eventually five steps we're going to go through every single one of these then we're going to take it one step further and we're going to show you how to add an operator that will actually run the businesses for you. Okay now i don't start with this because let's not be irrational you're not going to do your first deal with zero time zero money zero time after you buy make a ton of thousands of dollars in profit and go buy your bugattis and jet off it's probably not going to happen. Right. You're going to spend some time up front but afterwards watch how this compounds i'm going to tell you the things that i wish people told me in the beginning. And i never really understood why they didn't here's the 101. If you want to do deals right now you need you a phone an attorney and you need to kind of know what you're doing aka learn buying businesses not that difficult of a skill we have plenty on our website for you to learn how to do it guess how much this all costs per deal basically all free except your time and maybe two to five thousand dollars in legal costs typically now if you want to do a 202 level you ready for that warren buffett. So we want to go all right if you're ready for that here's how you build an actual holding company with a operator in it and you do a ton of deals you need a right hand ahead of each business eventually you might need a cio chief investment officer and maybe a turnaround specialist now if this is sounding kind of nutty because you're doing your first flip or maybe you flipped a couch or a house or a dog or what whatever do what are you guys flipping you guys flip everything well even if you're here i want you to know where the goal is because there's that stupid quote as kids about if you shoot for the moon you land amongst the stars except oddly it's true and so here's what it looks like at a pro level so when i run my business what does it cost me nobody tells me that i'l tell you guys a right hand chief of staff who basically oversees just about everything that touches me costs me 100 to 300k a year ahead of each business usually gets 10 percent of the business plus 100k plus salary i use milestones and a three-year vesting period google that if you don't know what it is. And then i have a cio of my portfolio of businesses these typically start about 150k plus a percent of the total return of everything they manage this is how family offices run. And then maybe if i want to go 303 level i have a turnaround specialist you know what that is it's like you know when you guys you guys know way more about real estate than i do so watch me butcher this like i do talk in sports. But like you know you buy a house. And you get a general contractor to come in and fix up the house because it's a nightmare right and lots of people buy for their first house. Like oh i got this deal because this house is terrible. But it's on a great block. And then you go. Yeah. Okay. That's cool. But how many times does construction come under budget and faster than you thought it was going to does that ever happen no. So that's why we don't do turnarounds in our first deal the second your accountability comes buddy comes to you or you dm me on instagram and you go cody. I just bought this terrible business that's unprofitable it's going to be awesome because we're going to turn around i'm going to be like you obviously weren't at tyke's summit because that's not where we're doing so this is 303 level but that's where you make the real fu money now this is the cool part here's just the coolest part. Okay. So this is the same deal we just looked at except look what happens same deal except i add at the bottom my operator payout my fractional cfo oversight and my right hands aka my chief of staff across the portfolio as long as i have three businesses i still make 17k off of this acquisition just myself with everybody else handling anything that could possibly go wrong in that business don't even call me i'm on a beach somewhere the cool part about this is the more deals you do the less each deal costs you in overhead and the more money you make this is how the pros do it. And it's the beginnings of how private equity companies are formed private equity companies don't like to talk about it. But we do now you might be saying all right cody i believe.


You we should buy businesses i can do deals i kind of understand the structure of doing deals now what type of business here's a strategy that i came up with i call it sows i want stale old weak simple businesses stale old weak simple if you come to me and you say the word proprietary i'm out if you say that you are running a biotech company and it's going to be the next hot new thing what do you think i am out. I want the opposite of sexy i want boring businesses that are so simple my grandma understands them grandma doesn't get it cody doesn't buy it that's your rule. Okay now what does sales exactly mean this is a real company we bought this company was actually a sick purchase if i might say all right stale. I want revenue that's flat for three years i want it to be an old company 12 years old in this instance i don't need it to be that old three to five years typically is cool for me week meaning not a lot of marketing they wouldn't know what to do with ryan pineda on his instagram account that would blow their minds simple this was an outsourced chat company which basically means there's a group of people in the philippines and when you want to go to a lot when you want to go to a get your handyman to come fix your house you know you got to wait until they open the next day that doesn't really work right so these people are triaging in the philippines responding to you this was a hundred and fifty thousand dollars and let's make it easy and call it profit a year i bought it for 75k now they do three hundred thousand dollars a year and our goal which is this year now is a million bucks why would they do that deal with me this seems crazy. Right well i gave them a small size of the upside this was the guys like third business he had it forever he was ready to retire and i could plug it into my giant ecosystem this is what i call your unfair advantage that's 404 level things but first i want you to learn to find good deals then the real pros know how to find really good deals for them we'l talk about that all right next you know how that one who's that guy like the asian dude who's in front of the houses and he kind of like yells at you to burr you guys seen that. All right so i take that. And i got a little spin it's called bert. So i gotta guess i got to put my like rolls-royce in front of like a shitty house next and do instagram's videos i think that's what he does. Anyway i want to buy boring businesses i want to add recession resistant i want to buy them in recession resistance sectors i want to raise the prices and i want to add technology now this is my process again and again for doing deals i sit on the board of a six and a half billion dollar hedge fund not tiny and and i was talking to him about his name's alex who runs it. And i've been friends with him for a long time. And i was like alex what are we going to do to manage inflation right because i actually some people think inflation's going away i don't. I think we're going to hit a recession i think inflation is going to stay here for a period of time i think it's going to get worse before it gets better. And so i was like what's the best thing we can do a hedge fund can do anything they can short they can do commodities they can do derivatives they can go wild. And he's like the best thing you can do is buy boring businesses in recession resistant sectors raise prices and add technology. And i was like are we sure i mean i know that's why i talk about are we positive on this. And then we started doing the exact allocation and it turns out so far he's right now if you want to know what i consider to be these brrt strategies we have a blog post this is free too 130 boring businesses i love to buy you can take a picture and go to the website and check those out you'd probably guess what some of them are roofing companies land escaping companies event planning companies social media companies these are businesses that you know how sometimes people will say to me ah cody well that business doesn't have a moat i go how hard do you think it is to compete with the landscaping companies in your neighborhood have you ever had a landscaper that you're like well that shows up on time it's subscription pay he offers additional services and he refers me out to other providers never happened not in the history of the world so the businesses that exist already are so easy to compete with that you don't care as much about emote you care about profit.


Is a good deal you ready for that bezos level no not that bezos i talk about this bezos let's be serious here you guys think i'm gonna bring you that amateur stuff all right now the next two slides i'm going to show you are technical i don't want them to intimidate you there's going to be some bigger numbers on there's going to be some more specifics you don't have to do this right at the start but unlike most people that will just give you this in order to sell you this i'm going to give you this and you will get to find your way here. Okay. So this is a truth i was given a speech not that dissimilar to this one. Actually so you guys probably got a steal i was giving a speech to my friends group of people that had to be worth 10 or 20 million dollars it was about like 200 people let's say a bunch of people worth hundreds of millions of dollars in the room i asked them all to raise their hand if they'd ever done a deal before everybody's hand goes up they've done a deal before. And i go how many of you guys have this an investment memo how many of you guys actually write down why you did a deal have criteria for why you did a deal and then track if it was a good deal or not what do you think the answer was in a room of 200 people worth 20 million dollars to 100 million dollars zero it shocked me i can't believe you guessed it's. I was shocked and then i asked them another question i'm like wait a second how much have you guys allocated and one of the guys who runs the group was like ah you know probably 600 700 million across the group i'm like jesus christ if you do one thing make sure it's this the only way to learn is to measure your progress would you ever go play golf i hate golf sorry ryan. So. But i'm going to use it because i know that's what you guys are into some of you but say i was into golfing and i unlike any have you guys ever seen the me by the way which also cracks me up it's like a woman like looking up like this at her husband. And he's like. Yeah i par forward on a birdie i don't know what i'm talking about here. And she has this like look on her face and at the bottom it's like no woman ever anybody there's not enough women in the audience because they feel me on this thank you nobody cares nobody cares about the golf score that said you men and women who play golf you track your score right each time you're like i'm trying to get a little bit better i want to get better here i want to get better there as an investor you got to do the exact same thing if you don't keep a scorecard you'l never know if you're getting better or winning so here's my investment memo this is usually very proprietary. Oh i use that word proprietary meaning that investment firms don't share i have a ranking system you can see here there's basically one to five nine categories you guys can steal it if you want you don't have to use math on it you can use gut level feelings too. But i basically am saying are the terms. Good do i like the team do i think that this asset class has room to run do i like the financials of this business do this and you will do what people with 20 and 100 million dollars apparently do not do that's how we take their chairs. Huh so that this next room is full of all of us at their level the second thing this is a little wild this is called an outcome calculator now when i think about a deal. I actually despite having bought done hundreds of deals despite being public on social media i'm actually super risk-averse i hate i don't like risk i would never gamble i'm super nervous about losing money and yet i allocate tens of millions and sometimes hundreds of millions of dollars a year the reason i get comfortable doing it is because i use something like this what this basically says is from top to bottom top is worst case scenario bottom is best case scenario best case scenarios that company approachment crushes it we add software to it we sell it for a billion dollars worst case is the tech doesn't work all the clients leave us. And i want to understand probabilities so if you guys get really serious i want you to have an outcome calculator. But you don't have to have it now and the reason you don't have to have it now is because what will stop most humans is over complicating things. So i did a deal with a guy who was a stanford grad harvard mba we were looking at a dental manufacturing company in chicago super sexy. I know. And we almost did this deal about three million dollar deal. And he we show up to due diligence which means we're analyzing the company and he's like he pulls out this spreadsheet. You know it's almost like those memes where they're like you want to know the list. And then they drop it down and the thing rolls out so he brings out that version of a spreadsheet. Oh my god. I don't really can't understand this man this is a lot what do you have in here. And he's like. Well i did a forecasting model. And then i did this. And then i did that. And i go. Okay. Cool. So i asked the guy i'm like can i see your tax returns did you guys make money on your tax returns the last three years. Oh no zero dollars. Oh wait can i see your bank statements but did you lose money the last three years. Oh yeah. Well like 200 000. But it's actually from this and this and this no deal's done i don't need a model. So what will kill most people is over complicating don't do that in the beginning you don't need to this is all you need to do a deal 10 steps to buying a business starts with you guys are already on step one which is you know about this opportunity all the way to your first 90 days you buy a company and take it over this is the path and the path is not a 472 page spreadsheet now the cool part about today is most people do the opposite of what they should when the market is tanking what do they do sell when the market is at all-time highs what do they do buy and this is why we have a nation of speculators and the investors have all the money but you guys are learning how to do deals and you will have something really key that most people that are already investors will not it's called an investment hangover you are scientifically proven to do worse on deals after you have just had a couple deal losses we know this and invest in because we track it so typically you have something called a shelf and investments in private equity if like your last couple deals sucked but you're still good they'l just say you got to be on the shelf for a second man you're not going to run point on a deal for a minute because your deal mojo's off for lack of a better word you got a hangover you gotta like drink some water you gotta i don't know what. But we gotta fix that you know karmic thing you got going on and that's very typical for humans that don't have an investment hangover you are much more likely to do deals and succeed and what i want you to remember is that you guys are going to be the type to buy when there is blood in the streets because there is about to be now i'm going to close with if you guys want to be on the email list and if you want to we're not actually launching something in this space right now that's an old slide but if you want to be on the email list it's free and in this too i believe you get the powerpoint. So if you liked anything on the powerpoint you can take a picture of that and it should download automatically if it doesn't respond to that email we'l take care of it i want to end with this there are moments in both life and you're investing life where you can have what's called an asymmetric return you can make much more than you probably should because you chose a point in time in which most people probably wouldn't i believe 2023 is coming into that moment i believe that if you guys lean on this opportunity of investing into in my opinion but choose your poison boring businesses you'l probably find me somewhere in 10 years and there'l be some form of thank you how funny is that you're going to tell me thank you next time i see you but truthfully buying businesses at this point in time is a life-changing activity the only thing that i'l say your cautionary word of advice is your first deal is your most important deal because if you lose money on your first deal you're going to think business buying is bad not i did a bad deal. So what i want you to think long and hard about is choosing the poison which deal do you want to do first and then let's end with this how many of you guys feel like not just the economy is a little tough. But maybe the world that's out there right now needs a hand how many of you guys feel like it's a little harder than it's ever been before how many of you guys think maybe the direction of this country is a little is a little a little tougher than it's ever been before i guess i want to ask you why you can't be part of the solution to fixing that what if a thousand people in this room go out to a thousand cities across america and you get rid of the starbucks on the corner and you buy the other small business next to it and you make sure that amazon isn't the only place where you can buy clothes from china. What if instead of us giving up all of the ownership to the big boys we take a little bit back i think that you can do that. And i hope you do it to make a bunch of money. And i hope you drive a bugatti if you want one. And i hope you buy a giant house bigger than ryan pineda's because i hear he's got a big one but even if you don't do that i really hope that you helped this country because i think if you don't nobody else will thank you so much for having me give it up for cody sanchez.

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