The Secret to Buying Boring Businesses: A Recession-Proof Strategy
Tobiloba OdejinmiBy Tobiloba Odejinmi
Education
May 29, 2026 • 12:14 AM
8m8 min read
Verified
Source: Unsplash
The Core Insight
Cody Sanchez outlines a strategic framework for acquiring 'boring' small businesses (laundromats, HVAC, car washes) as a hedge against economic volatility. By leveraging the 'Great Retirement' of baby boomers and utilizing creative financing like seller notes and SBA loans, investors can build cash-flowing assets that outperform speculative tech stocks and volatile markets.
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Education Specialist & Editor
Tobiloba Odejinmi
Tobiloba Odejinmi is an education specialist dedicated to helping students and lifelong learners discover the best scholarship opportunities, study techniques, and career pathways.
The Kodawire Editorial Team consists of experienced journalists and subject matter experts dedicated to delivering accurate, well-researched, and engaging content.
The Case for Boring Businesses in a Volatile Economy
What You Need to Know
The Great Retirement: Baby boomers are exiting the workforce at record rates, leaving $5.1 trillion in small business assets behind. This creates a massive buyer's market for those ready to step in.
Buy, Don't Build: In a volatile economy, avoid speculative tech stocks. Focus on "boring" cash-flowing businesses like HVAC, plumbing, or laundromats that remain essential regardless of market conditions.
Leverage the Structure: Use SBA loans (up to 90% financing) and seller financing to acquire assets using future profits rather than your own upfront capital.
Tech-Enablement: Modernize legacy operations with software like Jobber or Deal to increase efficiency and valuation, turning "boring" into high-margin assets.
Every decade or so, the economic clouds darken. While many investors panic, those with an abundance mindset see the rain as gold. I’ve spent my career in the trenches of investment banking and private equity, and if there is one thing I’ve learned, it is that the most reliable wealth is built when everyone else is running for the exits. We are currently witnessing a massive transfer of wealth, the "Great Retirement", where baby boomers are exiting the workforce, leaving behind trillions in small business assets. These aren't high-flying tech startups; they are the plumbing, HVAC, and service companies that keep the country running. For those looking to scale, understanding how to leverage modern tools is key to outperforming legacy competitors.
Analyzing P&Ls is the first step to identifying a profitable, boring business. (Credit: Jon Tyson via Unsplash)
Why You Can Trust This
My perspective is rooted in years of institutional finance experience at Goldman Sachs and my current role running a holding company of 26 boring businesses. I don't rely on theoretical models; I rely on the P&Ls of the businesses I own and the data I track daily. My research process involves analyzing market indicators, vetting deal structures, and stress-testing portfolios against recessionary environments. I’ve personally navigated the transition from W2 employee to business owner, and I’ve synthesized these lessons to provide a blueprint that prioritizes cash flow over speculation.
The 10-Step Blueprint to Acquiring Your First Business
Buying a business is not rocket science, but it does require a disciplined process. I break this down into 10 distinct phases:
Foundation: Understand the micro-private equity asset class.
Deal Clarity: Define your specific criteria, location, industry, and cash flow requirements.
Origination: Source deals through platforms like BizBuySell, Empire Flippers, or Quiet Light.
Selling: Build rapport with the owner; remember, you are buying their "baby."
Negotiation: Drive terms based on the seller's specific motivations.
Valuation: Determine the true worth based on cash flow, not hype.
Financing: Utilize SBA loans and seller financing to minimize cash out of pocket.
Structuring: Create custom terms that protect your downside.
Closing: Finalize the legal transfer of assets.
Integration: Transition ownership and implement your operational improvements.
Strategic planning is essential when transitioning from employee to business owner. (Credit: Miguel Ángel Padriñán Alba via Unsplash)
The Real ROI
When you buy a business at a 2x or 3x multiple, you are essentially buying a cash-flowing asset that pays for itself. Unlike real estate, where you might wait decades for appreciation, a well-run service business can provide immediate cash-on-cash returns that dwarf traditional investments. The ROI isn't just in the profit; it's in the ability to control the pricing and operational efficiency of the asset, creating a compounding effect that is nearly impossible to replicate in the stock market. If you are interested in how remote productivity can impact your operations, it is worth noting that many service businesses can be managed with a hybrid approach.
To execute, start by reviewing your own personal P&L. Where are you spending money? If you own real estate, look at the landscaping or property management companies you pay. These are your "unfair advantage" deals. Because you are already a customer, you have a direct line to the owner and a clear understanding of the business's value. Approach them not as a corporate raider, but as a successor who respects the legacy they’ve built.
What Most People Get Wrong
The biggest mistake I see is people trying to buy "turnarounds." They see a failing business and think they can fix it. If you are buying your first business, do not buy a problem. You are not an expert in HVAC or plumbing yet; don't try to fix a broken operation. Instead, look for healthy, boring businesses where the owner is simply ready to retire. You want a business that is already working, not one that requires a miracle to save. Avoid the trap of over-automating before you understand the core manual processes of the business.
Building rapport with the seller is critical to a successful acquisition. (Credit: Quilia via Unsplash)
My Recommended Setup
Jobber: Essential for managing service-based businesses and automating customer communication.
Deal: The go-to for managing international contractors and handling complex payroll compliance.
BizBuySell: The primary marketplace for sourcing small business deals and gauging market valuations.
The Decision Matrix
Not sure if you're ready? Ask yourself these three questions:
Can I reach the owner? If it's too big, it's not for you.
Is it meaningful? Does it solve a real problem or integrate with my current assets?
Can I operate it? Do I have the knowledge, or can I hire an operator to run it for me?
If the answer to all three is "Yes," you have a potential deal.
I’ve laid out the blueprint, but the real work happens in the arena. If you were to look at your own expenses today, which business would you want to own, and why? I will be replying to every comment in the first 24 hours to help you think through your first acquisition.
Boring businesses like HVAC, plumbing, and service companies provide essential services that remain in demand regardless of market conditions, offering reliable cash flow compared to speculative tech investments.
The 'Great Retirement' refers to baby boomers exiting the workforce at record rates, leaving behind $5.1 trillion in small business assets, which creates a significant buyer's market for those looking to acquire established companies.
No. The author advises against buying 'turnarounds' for your first acquisition. Instead, focus on healthy, boring businesses where the owner is ready to retire, ensuring the business is already functional.
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Editorial Team • Question of the Day
"If you could acquire any "boring" business in your local area tomorrow, which industry would you choose and why?"
