The SOWS Framework: How to Find Businesses Ready to 10-20x Revenue
Buying a business can be a great way to generate revenue, but how do you find businesses that are ready to 10-20x their revenue? This blog introduces the SOWS Framework, a battle-tested system that focuses on businesses that are Stale, Old, Weak, and Simple to help you identify the right businesses.
Codie Sanchez
Investing millions in boring businesses & sharing what I learn. On a mission to create 1M financially free humans | My bio, not my tombstone, I hope it changes
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I've bought 75+ boring businesses (doing $100M+ in revenue)
— Codie Sanchez (@Codie_Sanchez) June 22, 2023
I use 1 system to identify each acquisition.
The SOWS Framework: -
Everyone knows to look for businesses that have:
— Codie Sanchez (@Codie_Sanchez) June 22, 2023
• Low risk
• Profitability
• Growth potential
• Reasonable price multiple
• Simple (not easy) execution
But how do you find the businesses truly ready to 10-20x their revenue? -
I have a battle-tested framework.
— Codie Sanchez (@Codie_Sanchez) June 22, 2023
I call it SOWS.
It focuses your target on businesses that are:
• Stale
• Old
• Weak
• Simple
Derisked by using loans/seller financing to fund the purchase. -
Category 1: Stale Businesses
— Codie Sanchez (@Codie_Sanchez) June 22, 2023
Biz's with that 90s feel to them.
• Ancient website
• No social media posts
• Still uses fax machine + landline
Minimal current innovation = easy cost savings (automated software) + revenue growth (modern marketing) -
I took a laundromat to $5M in revenue in 2 years by:
— Codie Sanchez (@Codie_Sanchez) June 22, 2023
• Running dating app ads
• Building SMS marketing for retention
• Reprogramming washers to remove duplicate cycles
Simple changes to a stale biz. -
Category 2: Old Businesses
— Codie Sanchez (@Codie_Sanchez) June 22, 2023
A business that has been around for 50 years > a freshly-minted startup.
• Proven cashflow
• Consistent demand
• Has weathered recessions -
Category 3: Weak Businesses
— Codie Sanchez (@Codie_Sanchez) June 22, 2023
Businesses you hate employing but have no alternatives for.
Can't remember the last time I got an electrician:
• On time
• With automated billing
• Who sent follow-up texts
Instantly differentiate yourselves from the competitors. -
Category 4: Simple Businesses
— Codie Sanchez (@Codie_Sanchez) June 22, 2023
Key reminder: simple ≠ easy.
You want businesses with clarity, BUT also a clear moat.
Simple businesses enable you to:
• Rapidly scale up operations
• Easily fine-tune the business model -
I hope this framework helps you think bigger than chasing the next trend.
— Codie Sanchez (@Codie_Sanchez) June 22, 2023
It's not the only way, but it is one potentially very lucrative way.
You can follow @Codie_Sanchez and RT here if you found this interesting:https://t.co/Ftml9bM3Zn -
SOWS is how I know which biz to buy. But how do I buy a business, beginning to end?
— Codie Sanchez (@Codie_Sanchez) June 22, 2023
I'm hosting a free, live Masterclass next week on the 10 steps I've used to buy 20+ biz's.
We only have 5k capacity tho, so get in now
↓https://t.co/YWEhy9IHd8 pic.twitter.com/VAt7KV0Q7b