In this solo podcast, Mike Andes argues that owners of businesses generating under $1 million in annual revenue should focus all available capital on growing their own company rather than diversifying into stocks, real estate, or side ventures. He critiques the common diversification narrative, illustrating with a simple 10‑year, 10% stock‑market return scenario that would only double a $50k investment, which he deems insufficient for wealth creation at this scale. Andes contrasts that with the potential to double a business’s size and profit by reinvesting the same amount in equipment, crews, and marketing. He introduces his "3S" wealth‑creation framework—Save, Sow, Spread—describing a decade‑long saving phase (personal frugality to fund business growth), a subsequent sowing phase (reinvesting saved capital to accelerate scaling), and a final spreading phase (giving back to community or family). He warns against trying to execute all three phases simultaneously, which leads to half‑measures and stalled growth. Throughout, he uses a Warren Buffett anecdote to illustrate the power of an all‑in, high‑risk approach for early entrepreneurs, while acknowledging that diversification makes sense once substantial capital is available. The episode’s core message is that for small‑scale entrepreneurs, the highest returns come from reinvesting in their own business rather than passive market investments.
Chapters
If you have a business that does under $1 million in annual revenue, I think it is crazy to invest in anything besides your business. I don't care if it's the stock market, real estate, thinking about diversifying. If you have $100,000, $200,000, $300,000 in annual revenue business, the best use of your money is spending any cash you have on your business, growing it, getting more customers, investing in marketing, hiring, expanding the amount of crews that you have. And I'm gonna explain why today. 'Cause a lot of us have heard the rhetoric around diversification, investing in a 401, an IRA, and what we start to do is we start to take the limited funds that we do have and diversify it into 5 different things. Some in the stock market, then we get a little duplex on the side, then we have a little side hustle, and all of a sudden we have 5 little small businesses earning small trickles of income. However, the biggest hack to building wealth in America is having a small business. You're like, well, what about Warren Buffett? He diversifies and he talks about diversification. If you look at how he made his first million dollars, his first $10 million, it was buying Berkshire Hathaway, which at the time wasn't a conglomerate. It was a textile business that was failing. And he went all in, high risk on one thing. And so if you're doing $2, $3, $5, $10 million in annual revenue, you have a whole bunch of cash. Yeah, it makes a lot of sense to diversify diversify, use real estate, the stock market to be able to get around taxes, to be able to diversify your wealth in different areas of the economy and the risk of as you grow your wealth, or you don't know where to put the cash in your business. So you got to put somewhere so it actually earns some sort of income or grows in value. Great. Invest in the stock market. I'm a big fan. But when you're running a business under $1 million, it is insane that you would spend your money anywhere else than inside of your business, assuming You know your customer acquisition cost, assuming that when you spend a dollar, you're able to make $2 in profit. If you were to take $50,000 and you were to go put that in the stock market for the next 10 years, and let's assume there's no stock market crash, there's no recession, but over the next 10 years, we have an average return of 10%. In 10 years, you'd wake up with about $129,000. So you would have more than doubled your money. Let's go. That would be a phenomenal, stock market run. And the problem is, in 10 years, having $120,000, okay, it's not life-changing. It doesn't move the needle a whole much on like your overall wealth strategy for your whole life if you want to go big. And so my proposition to you, if you have $50,000, $100,000, instead of thinking that you're going to get wealthy by just putting the stock market or, you know, just dollar-cost averaging in very slowly, which I'm in favor of, if you have a small business, investing into it Buying more customers, buying more equipment, buying more trucks, and being able to grow and expand it is likely the best use of your money. Why? Because if I take $50,000 today and I added a new truck, a crew to my existing business, I spent money on advertising and was able to double the amount of customers that I had on a recurring basis inside of my company. If I was able to do that, in 10 years, there's a very good likelihood I would not have just made an extra $70,000. I very well could have doubled the size of my business. I could have doubled the amount of profit I was making. It's very likely that that $50,000 invested today in my small business to get it off the ground or ramp it up with marketing expansion, that $50,000 could very well be paying me $70,000 of profit per year by year 10. I say this because I see so many people that are listening to videos, podcasts, books, and they're listening to people that have made $10 million, $50 million, $100 million talking about investing into cryptocurrency, real estate diversification, S&P 500, dollar cost averaging. And I agree with all those things. But when you have a small number— and the reason I talk about this is because I didn't make my original first million dollars in the stock market. I didn't make it in real estate. Why? Because I didn't have any money. And so if you have a lot of money, investing is great in other asset classes. But when you have a small amount of money, you need huge returns. You need 100% year-over-year return. You need to be able to put in $100 to get a customer and make $3,000 from that customer this year. That kind of return doesn't happen in the stock market. And the only way to really get ahead and go from a couple thousand dollars in your bank account and trying to get to a million, you're not like, go put $1,000 in the stock market, wake up when you're 80 and it's still not gonna be a million dollars. And so if you have a small amount of working capital, if you have a small amount of cash right now, I highly recommend know your numbers enough in your business to where you can confidently put that money in and know you're going to get expected return. You're going to expect a certain number of customers, you expect a certain amount of revenue increased, a certain number of leads. If you're doing under $1 million, I kind of look at wealth creation in 3 phases. I call it the 3S process, and that is Save and sow and spread. And I could very well say it's 10 years per. And that is during the save phase. It's kind of like a squirrel hiding acorns. It takes every single acorn and it hides it away and it just stacks away the acorns. That could be 10 years. That could be 10 years of grinding and hustling and saving every single penny, pinching pennies in your personal life to be able to afford the growth in the business. That's the save part. And usually your net worth at this phase, it's not going up very much. It's just time is going by and you're spending a bunch of money on the business. You're investing back into the business. You're saving every dollar in your personal life to be able to put it back into the business. That's the save part. Now, usually after 10 years, you start having momentum. You have skills, you have a leadership team, you've gained skills around leadership, you figured out how to do marketing, you figure out which marketing channels work well in your market. And now you start your sow Phase. This is where you take the seed that you've been saving up for a long time and you start sowing back into the business. And this is the difference between someone that builds a million-dollar business and someone who builds a $10, $50, or $100 million business is do they sow back into the risk? Do they invest back into the company? So many people are willing to work 1 year, 2 years, 3 years, maybe 4 years saving, trying to grow the business, and then they get a little momentum and what do they immediately start doing? They start spending it, they start letting off the gas in their business. They never take the seed that was saved and then sow it and multiply it and duplicate it. And this is in the S-curve, kind of like save, and then you start the sowing. And all of a sudden the momentum starts to build. This is the part that you put 10 more years in of massive growth. And I'm not saying this is for everyone. I think that the vast majority of people should probably build a business that does about $800,000 to $1 million in revenue, has 6 to 8 technicians, they can manage it all by themselves. Then take a weekend vacation and everything goes smoothly. Lots of recurring revenue. Most people should do that. But for the crazies out there, the crazies out there that wanna grow a bigger business, if that's something you want, don't think you're gonna be able to build that in 3 or 4 years. If you're starting with $50 grand today, in 3 or 4 years, you're not gonna have millions and millions of dollars in revenue or millions and millions of dollars of profit. You're not going to. And anyone that, tells you that is selling you something. Those 10 years of saving, crucial, important. You need the skills and you need to save that capital to be able to pour back in the biz. And then during the 10 years of the sowing phase, this is where you have massive expansion, massive amounts of growth, revenue. It seems like all of a sudden talent is coming your way because the size of your business, the momentum is there, like everything is pushing you towards success. And then in my opinion, for myself, I look at the third S as spread. That is, now I have saved the seed, I have sown the seed, and now I spread the seed. I give it away. It's like at the end of, you know, once the wheat dies, the seed just can get blown away. Like it just, the seed gets spread. And I want to be able to give. I want to be able to have other people be able to come behind me and do exactly what I've done. I want to be able to give it back to the community or to my family or the people that I love. But a lot of times people I have found try to do all 3 at the same time. And because of that, they're half pregnant on all 3. Meaning they try to save money, but at the same time, they kind of try to invest in the business. At the same time, they kind of like try to live this lifestyle. At the same time, they kind of like try to give back to their— versus just going all in at this stage of their career where they're currently at. And so oftentimes, businesses will stay under $1 million because we get distracted with all the other investment opportunities instead of spending on the thing that is actually gonna drive the needle and make you the most return. Which is gonna be your small business.
