How To Build A Business That Runs Without You - Codie Sanchez - #1145

**Chris Williamson** (0:00)
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What's the biggest lie that people are told about getting rich?

**Codie Sanchez** (0:30)
That it's actually about looking rich and not getting rich. I think especially for men these days, like it's all in your face. On social media today, you can see just about everywhere what somebody's success level is, except if you were to pull up the balance sheet, it would be something very different. And so I think rich actually is two things. One, yes, do you have enough money, you know, divided by 0.4 to have the life that you want?
And then two, it's, do you actually like the life you want? I love Naval's quote, which is, you know, basically the definition of success is, do you have what you want out of life? The definition of happiness being the same. And I think we all kind of trauma bonded as business owners over the fact we should be miserable when we run our businesses. You don't look miserable. It's hard. But I don't think being rich or being an owner has to be miserable. And that's a great lie.

**Chris Williamson** (1:20)
I wonder how many people love the idea of working for themselves until they realize that they end up being trapped by their own business.

**Codie Sanchez** (1:27)
Well, I mean, interestingly enough, 46% of business owners actually aren't profitable. So most business owners aren't profitable ever.
64% of business owners are profitable, but they make less than minimum wage in California, which is actually wild. So if you think about it, that the average business owner makes somewhere between 40 and 60K per year. I think minimum wage, if you were working full time in California, takes out to about $75,000, $78,000 a year. So yeah.

**Chris Williamson** (1:56)
You don't need to take your job home with you. You're not stressing over whether or not you can make ends meet inside of the business. You're not paying yourself in order to front load the staff's wages for next month.

**Codie Sanchez** (2:06)
Yeah.
And I get a lot of crap for talking about wanting to buy businesses instead, but it's mostly because it's really fucking hard to start one. And most of them fail. And sadly, the ones that do win, that means you paid for the right to one day eventually make some money for three to four years, and people don't think about that. And so if you actually have a business that makes money right now, you're in the top 10 percent. If you have a business that makes a million dollars a year, you're well above the top 1 percent, even though you're probably only taking home 150K a year. And if you have a business that's a $10 million a year business, that's 0.01 percent of all businesses.
So it's way harder than anybody thinks.

**Chris Williamson** (2:45)
Does that mean that very few people should start businesses or become business people?

**Codie Sanchez** (2:51)
I think it means you got to know what you're getting into, you know. I think anybody who's trying to sell you that you can have everything you want inside of 30, 60 or 90 days and you can do it with little or no money down and you can do it with no effort, it's not going to work out. The only time it works out is when you look at the math in most of these things. And I'm just a nerd. Like I look at the spreadsheets of buying a business and I say, what's the lowest default rate you could have? That's an SBA loan. 13 percent of those businesses fail per year. That's just public math. Then I look at start-ups, 90 percent of them fail within a five to 10 year period. So you basically have these crazy two amounts of success rates.
I think probably most people should go work in somebody else's business that's really successful first, before you ever think about starting your own. You'd be much better off.

**Chris Williamson** (3:38)
It's interesting. The question, could anybody become a business owner, is probably quite high with enough childhood trauma and caffeine and sleep deprivation and obsession. Probably anybody could. That doesn't mean that anybody should. I saw this a lot when I was coming up doing nightlife stuff.