The SOWS Filter
Buy businesses that are Stale, Old, Weak, and Simple.
- Difficulty
- Moderate
- Time to result
- ~months to results
- Steps
- 4
- Confidence
- 90%
SOWS is Codie Sanchez's four-part screen for choosing which boring business to buy. She looks for businesses that are Stale (little innovation, sometimes literally still using a fax machine), Old (5-7+ years so the Lindy effect applies), Weak (weak competitors and weak internal execution she can improve), and Simple (easy enough that anyone could understand it). The logic is counterintuitive: these traits mean the buyer can layer on marketing, systems, and team to grow profit without taking on more complexity than they can handle. It de-risks a first acquisition so it goes well enough to build confidence for the next.
Origin
Developed from Sanchez's 12 years in finance and private equity watching the wealthy buy other people's hard work, then codified for her Main Street Millionaire book and unconventional acquisitions community.
Core principles
- 01The best businesses to buy are counterintuitively unsexy
- 02Low complexity is a feature, not a bug, for a first acquisition
- 03Longevity predicts future survival
- 04Weak competition and weak execution are opportunities to add value
How to run it
- 1
Check for Stale
Look for businesses that haven't innovated much. Apply the 'fax machine test' or look for paper invoices instead of QuickBooks as signals of a stale operation you can modernize.
Pro tip Stale often means the current owner has left easy improvements on the table.
- 2
Confirm it's Old
Verify the business has existed for at least 5 to 7 years so the Lindy effect works in your favor and failure risk drops.
Watch out A business under 5 years old carries the 50-60% startup failure risk you are trying to avoid.
- 3
Look for Weak
Target spaces with weak, fragmented competition and companies whose own execution is weak, so you have room to compete and add value.
Pro tip You can compete with a thousand nameless handymen in Austin; you cannot easily compete with Dell.
- 4
Demand Simple
Choose a business that is straightforward and easy to understand so you don't take on more complexity than you should on a first deal.
Pro tip Aim for a first deal so easy it feels almost too small; that success funds the next one.
Watch out The fastest way to lose money is thinking you know more than the owner and taking on too much complexity.
In the wild
Sanchez illustrates 'weak' by comparing thousands of anonymous handyman companies in Texas against an entrenched giant like Dell computers, showing where a new owner can realistically win.
→ Buyers redirect attention to fragmented, beatable markets instead of defensible incumbents.
Common mistakes
Buying complexity you can't handle
Treating a first acquisition like a total-disaster fix-and-flip means budget and time overruns; Sanchez warns construction projects never come in under budget and neither do complex first deals.
Assuming you know more than the owner
Overconfidence leads buyers to overpay for or mismanage a business whose real dynamics they don't understand.
Is it for you?
Best for
First-time business buyers screening acquisition targets.
Not ideal for
Experienced operators seeking high-growth, high-complexity turnarounds.
From the transcript
“sou which is when I look for businesses I look for a business that is stale that means that it's been around for a long…”
“the fastest way to lose money in buying a business is to think that you know more than the owner of the business and to…”
From the episode
Codie Sanchez: How to Make Extraordinary Wealth Buying Boring Businesses
Codie Sanchez