Codie Sanchez: Buy a Profitable Business Instead of Starting One

Key Takeaways

• Buying an existing business with $200,000 in profit is often safer than spending $50,000 to start a brand-new one from zero.
• Most successful acquisitions involve 'boring' service businesses like laundromats, car washes, or HVAC companies with steady cash flow.
• You must file a FinCEN BOI report within 90 days if you buy an LLC or corporation to avoid $591 daily fines.
• The SBA 7(a) loan program allows you to buy a business with as little as 10% down if you have a strong credit history.

Conventional wisdom says you should build your dream business from the ground up, starting with a laptop and a prayer. Here's why that's wrong for most small owners: starting from zero has a 90% failure rate, whereas buying a profitable business gives you immediate cash to pay your mortgage.

The Better Way to Own a Business

Codie Sanchez, a well-known investor in 'boring' businesses, recently highlighted this shift in strategy. She mentioned that her team is moving toward acquiring established players in stable industries, such as their recent move with Wavecell. As said on X, these acquisitions focus on companies that already have a customer base and infrastructure. For a solo plumber in Georgia or a print shop owner in Ohio, this means the fastest way to grow isn't necessarily finding new customers one by one. It might be buying the retiring competitor down the street. When you buy a business, you aren't just buying equipment. You're buying a phone that's already ringing.

Most people think they need a 'new' idea to be successful.

That's a trap. I've seen owners spend two years and $40,000 trying to launch a new app, only to end up with zero customers. Meanwhile, a local HVAC owner bought a small gutter-cleaning route for $60,000 and paid it off in fourteen months using the existing profits. gov/funding-programs/loans) offers 7(a) loans specifically for business acquisitions. These loans are designed to help you step into an existing operation rather than gambling on a startup.

Why Acquisitions Win

• Existing Cash Flow: You get a paycheck on day one instead of waiting months for your first sale.
• Proven Staff: A 5-person team that already knows the job is worth more than a stack of resumes.
• Bankability: Banks love lending against three years of tax returns. They hate lending against a business plan and a dream.
• Systems: The previous owner already figured out which software to use and which vendors are flakes.

The Compliance Reality Check

• BOI Reporting: If you buy an LLC, you must update the FinCEN Beneficial Ownership Information report to reflect you as the new owner. Missing this can cost you $591 per day in penalties.
• Asset vs. Stock: Decide if you're buying the whole company or just the equipment and customer list. A CPA conversation here's worth $500 to save you $50,000 in hidden tax hits.
• Permits: Most local licenses don't automatically transfer. You usually need to re-apply at your city hall the week you close the deal.

Buying a business is about skipping the 'will this work?' phase and moving straight to the 'how do I make this better?' phase.

If you want to grow this month, stop looking for a new idea and start looking for a business owner who wants to retire.

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📋 Disclaimer

This article is for informational purposes only and does not constitute legal, tax, financial, or professional advice. Laws and regulations change frequently, and the information presented may not reflect the most current legal developments. Always consult with a qualified professional (CPA, attorney, financial advisor) before making business decisions based on this content. MyBizNerd may receive compensation through affiliate links, but this never influences our recommendations.

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