HOW TO BUY A LOCAL BUSINESS

Want in on the mom-and-pop-shop life? It's easier (and more profitable) than you might think.

- by JASON FEIFER

Want in on the mom-and-pop-shop life? It's easier (and more profitable) than you might think.

“I call these ‘gateway-drug businesses,’” says Codie Sanchez. That’s because local businesses are often relatively straightforward to buy and come with existing customers and cash flow. Their owners may be retiring and don’t want a long negotiation. So once you do it the first time, you might see the opportunity to do it again. “You’ll realize that process of buying that laundromat is so damn close to buying an accounting firm, a law firm, a property management firm,” she says—hence the gateway drug idea.

Sanchez has a large portfolio of mom-and-pop shops, and now also teaches others how to buy and operate them through her company and online community Contrarian Thinking, as well as her bestselling book Main Street Millionaire. Here, she explains why mom-and-pop shops are such great (and often overlooked) assets—and how to get started.

You say that local businesses are often safer bets than startups. Why?

A lot of people were told that in order to start a business, you have to have some bright idea and do a startup. That's really hard, and has a terrible success rate. And I don't really like risk.