In a world where traditional employment often feels precarious, the idea of owning a business is becoming an increasingly attractive option. Codie Sanchez, founder of Contrarian Thinking, argues that buying a business, rather than starting one from scratch, can be a more reliable path to financial independence and wealth.
Sanchez's perspective stems from her extensive experience working with small business owners. Her latest book, Own or Be Owned, presents a compelling case for taking ownership in the business landscape. She challenges conventional wisdom by emphasizing that the opportunity to gain wealth through ownership is not just for the elite but is accessible to anyone willing to take the plunge.
For anyone serious about their financial future, Sanchez posits that the path forward is clear: either own part of a business or risk being owned by others. This article delves into her insights and strategies, offering actionable advice for aspiring entrepreneurs.
Why Buy Instead of Start?
Starting a business from scratch is fraught with challenges, including a high failure rate. Sanchez highlights that the failure rate for startups can be as high as 90% within the first ten years. In contrast, buying an existing business typically has a failure rate of less than 13% when financed through Small Business Administration (SBA) loans.
This stark difference in risk is a pivotal reason Sanchez advocates for purchasing a business. With established operations, customer bases, and revenue streams, existing businesses offer a more stable investment opportunity. She encourages potential entrepreneurs to consider this option seriously before embarking on the often grueling journey of starting a new venture.
"“You probably won’t stand at your grave at the end of the day and say, thank God I took no risk.”"
Rapid Response: Stop creating businesses. Buy one instead, with Codie Sanchez
The Importance of Systematization
One of Sanchez's key insights is the necessity of implementing systems within a business. Many small business owners fall into the trap of "cowboying it," relying on instinct rather than structured processes. This approach not only hinders profitability but also makes decision-making less reliable.
Sanchez emphasizes the need for business owners to adopt systematic approaches to operations, marketing, and financial management. By utilizing what she refers to as the 12 profit levers, owners can enhance their business performance. These levers include pricing, target audience, hiring practices, and promotional strategies.
"“If you don’t run on a system, you are not going to consistently be profitable.”"
Rapid Response: Stop creating businesses. Buy one instead, with Codie Sanchez