Alex Hormozi: I sold my company for $46,200,000 at age 32...7 LESSONS I learned..

The video is about the decision-making process that Alex Hormozi went through when he sold the majority stakes of three companies for $50 million and the seven variables he considered before making the decision.

This video by Alex Hormozi was published on Feb 14, 2022.
Video length: 33:05.

In this video, Alex Hormozi shares the seven variables he considered when deciding whether or not to sell his business for $50 million.

He discusses the importance of making quality decisions and how one decision can massively change the direction of our lives. Hormozi shares his personal experience of obsessing over the decision to sell his business for two and a half years and how it affected his mental bandwidth. He also talks about the external and internal story, money and finances, energy and headspace, team resources, the future and vision for himself, and what was the best decision for the business.

Ultimately, he shares what he decided to do and why.

• The quality of decisions distinguishes billionaires, millionaires, and people in debt.
• Alex Hormozi sold the majority stakes of three companies for $50 million after considering seven variables.
• His wife suggested shutting down the business, but he wanted to see if they could sell it.
• The seven variables were the story externally and internally, money and finances, energy and headspace, team resources, the future and vision for himself, the best decision for the business, and what he ultimately ended up doing and why.
• Alex Hormozi sold the majority stakes of three companies for $50 million because he realized he was not the best person to take the business to the next level, wanted to focus on his strengths and passions, create generational wealth for his family, and document the journey mentally for himself.
• The heart behind the business had shifted from the process to the outcome, and the company had 135 employees at its peak.
• The company ultimately sold for $46.2 million after considering money, energy, headspace, team resources, future vision, and best decisions for the business.
• Reasons for selling included realizing that having a sale is not necessary to be a legit entrepreneur, understanding that a big exit is not the only way to prove the sellability of a business, and recognizing that selling a business to prove a point to others is not a good reason to sell.
• Money considerations included realizing that selling the business would result in a tax event and a decrease in net worth, understanding that the cash received from selling the business can be reinvested to make up the net difference, and considering the potential growth of the company if it were not sold.

I sold my company for $46,200,000 at age 32...7 LESSONS I learned.. - YouTube

Introduction

• The quality of our decisions distinguishes billionaires, millionaires, and people in debt.
• The video is about the decision-making process that Alex Hormozi went through when he sold the majority stakes of three companies for $50 million.
• There were seven variables that he considered before making the decision.
• The process took almost 18 months of deliberation and back and forth.

Why did he want to sell?

• Alex Hormozi and his wife had just done $4.4 million in revenue and $1.7 million in owner dividends in March 2019.
• His wife suggested shutting down the business, but he wanted to see if they could sell it.
• A friend introduced him to an investment banker who specialized in their space.
• The banker told him that he could sell the business for $150 million easily if he continued the growth.
• From that moment onwards, Alex Hormozi's business plateaued, and he spent 50% of his mental bandwidth thinking about selling the business.

The Seven Variables

• The story externally and internally.
• Money and finances.
• Energy and headspace.
• Team resources.
• The future and vision for himself.
• The best decision for the business.
• What he ultimately ended up doing and why.

I sold my company for $46,200,000 at age 32...7 LESSONS I learned.. - YouTube

What did he ultimately decide?

• Alex Hormozi sold the majority stakes of three companies for $50 million.
• He realized that he was not the best person to take the business to the next level.
• He wanted to focus on his strengths and passions, which were not aligned with the business.
• He wanted to create generational wealth for his family.
• He wanted to document the journey mentally for himself.

Background

• The heart behind the business had shifted from the process to the outcome.
• Revenue went up but profit dropped because of lower churn and lowered prices.
• The company hired more people to show legitimacy, but the core team was still hustling.
• The company had 135 employees at its peak.

Selling the Company

• The company committed to selling in 2020.
• The bankers adjusted expectations due to the flu affecting the business.
• Revenue and profit continued to decline over the next three quarters.
• The bankers suggested stopping the sales process, but the owners wanted out of pain.
• The company started an outbound call center and promoted a team to become the face of the consulting brand.

Decision-Making Process

• The considerations were money, energy, headspace, team resources, future vision, and best decisions for the business.
• The company had a strong rebound in 2021, leading to more interested parties.
• The private equity firms saw the potential for the company to do well again and wanted to buy it.
• The owners considered the potential for growth and the best decision for the business.
• The company ultimately sold for $46.2 million.

Conclusion

• The decision to sell was based on the potential for growth and the best decision for the business.
• The company rebounded in 2021, leading to more interested parties.
• The company ultimately sold for $46.2 million.
• The decision-making process involved considering money, energy, headspace, team resources, future vision, and best decisions for the business.

Reasons for Selling

• Having a devil's advocate conversation with himself about selling the company.
• Realizing that having a sale is not necessary to be a legit entrepreneur.
• Understanding that a big exit is not the only way to prove the sellability of a business.
• Recognizing that selling a business is not the only way to level up one's skill set.
• Realizing that selling a business to prove a point to others is not a good reason to sell.
• Understanding that sometimes giving up something good for something unknown is necessary for growth.

Money Considerations

• Realizing that selling the business would result in a tax event and a decrease in net worth.
• Understanding that the cash received from selling the business can be reinvested to make up the net difference.
• Considering the potential growth of the company if it were not sold.
• Recognizing the benefits of diversification and the potential risks of being super concentrated.
• Understanding that wealthy people do not always sell, but sometimes take out debt to continue owning the business.

Lessons Learned from Selling Gyms

• Realizing that sometimes giving up something good for something unknown is necessary for growth.
• Understanding that the lesson learned from selling a business may not always be the correct one.
• Recognizing the importance of applying the correct lesson to the story.

Personal Considerations

• Feeling unbranded from the fitness industry and wanting to move on to other ventures.
• Recognizing that people have already moved on from the gym industry and that a handful of comments do not represent everyone's opinion.
• Consciously rebranding the podcast to reflect a shift away from the gym industry.

Watch the video on YouTube:
I sold my company for $46,200,000 at age 32...7 LESSONS I learned.. - YouTube