The Mainstreet Millionaire, by Codie Sanchez
My Summary & Review
The Mainstreet Millionaire is a guide to building wealth through acquiring small, established businesses.
I’m an entrepreneur with 3 LLC’s and I’m always looking for opportunities, but I have to admit, buying established small companies hasn’t really been on my radar. I think I’m changing that after reading this book. Don’t get me wrong, this was a really good book, but it’s not anything specific that I read that has intrigued me, it’s more of the idea that she put in my head with the concepts and strategies of actually buying a small main street business.
One of the main premises of this book is that there are a ton of successful small businesses in your own town with owners that don’t have any plans on what to do with the business when they want to retire. Without children that want to take over, many of these business owners would love for someone to come in and offer them a way out. And if you are the one that comes in to buy the business, you can also use the business’s future profits to pay for the acquisition. This allows the founder of the business to retire while also potentially having some input into the next few years of the transition. They’ll be more inclined to help you ensure the company stays profitable if you include them in some of the future benefits as long as the company does stay profitable.
"The central argument of this book is that buying profitable, established, cash-flowing businesses is the most underrated path to wealth. One that, if you do it right and are willing to put in the work, not only pays you enough money to quit your job but also allows you to pay someone else to run it with you. That's right: you own the business, you make a full-time salary, but you're potentially not stuck with another full-time job forever.
And unlike buying a house, you won't always need a big down payment to own this business. The previous owner may even hand you the keys to their legacy for less than you can imagine. But you have to understand the game. They'll want these three things in return:
1: You'll give them the ability to exit their business and retire.
2: You'll keep their business and legacy alive.
3: You'll give them a cut of future profits. ~ Codie Sanchez, Main Street Millionaire
R.I.C.H. Formula
Sanchez introduces her framework for identifying, acquiring, and growing small businesses without needing substantial upfront capital, which she calls The R.I.C.H. Formula.
Here’s a quick breakdown of Codie Sanchez’s R.I.C.H. Formula:
R - Research: Look for business opportunities that match your interests and skills. This means finding businesses that are already making money and have potential for growth.
I - Invest: Use smart financing options to buy these businesses without needing a lot of your own money upfront. This can include loans or creative payment plans.
C - Command: Set up systems and hire people to run the business. This way, you don’t have to be involved in every little detail and can focus on bigger picture ideas.
H - Harness: Once you have one business running well, consider buying more. This helps you grow your wealth while keeping a balance in your life.
Overall I really enjoyed the book. It’s a quick read, and gets right to the point without much fluff. I’m going to look around for some more similar books, so if anyone has any suggestions, feel free to message me on social media or email anytime.
If you're interested in buying business and learning about how to calculate their value and price, I'd recommend checking out my book summary and review of The Snowball: Warren Buffett & the Business of Life. Buffett is the greatest buyer of businesses in modern times. There's so many lessons to learn from this in-depth biography!
