Alex Hormozi: I STARTED AND SOLD 6 BUSINESSES BY AGE 32...my boring formula..

The video is about how to turn a worthless business into a sellable asset by productizing services, having a predictable acquisition process, and finding someone to replace the owner's role in the business.

This video by Alex Hormozi was published on Sep 15, 2021.
Video length: 15:10.

In this video, Alex Hormozi talks about how to turn a worthless business into a sellable asset.

He explains that most small businesses are not actually businesses, but rather self-employment jobs, and that in order to sell a business, it must be able to run without the owner. He outlines steps to productize services, establish a predictable acquisition process, and find replacements for key roles in the business.

Hormozi emphasizes the importance of creating a consistent process that generates predictable outcomes in order to have a sellable business.

• 99% of businesses end up closing down.
• Small business owners need to turn their businesses into assets.
• Self-employed people are not business owners.
• Business owners have a business that can run without them.
• Productize services to deliver them consistently.
• Replacing the owner's role in the business is crucial for making it sellable.
• Attracting high-quality people is crucial for running a successful business.
• Hiring people better than the owner is necessary for hyper-growth and hyperscale.
• Owners must make the business sellable to sell it someday for a lot of money.

I STARTED AND SOLD 6 BUSINESSES BY AGE 32...my boring formula.. - YouTube

Introduction

• 99% of businesses end up closing down.
• Only 1% of businesses ever get sold or trained.
• Most businesses are worthless.
• How to go from a worthless business to a business that has actual value.
• Small business owners need to turn their businesses into assets.

Self-Employed vs Business Owner

• Most people start as employees and then become self-employed.
• Self-employed people are not business owners.
• Self-employed people make significantly less for a long period of time.
• Business owners have a business that can run without them.
• Business owners need to prove to future buyers that the business can operate on its own without them.

Productizing Services and Predictable Acquisition Process

• Productize services to deliver them consistently.
• Have a predictable acquisition process.
• Pick one of the channels for acquisition: referrals, affiliates, manual outbound, owned media, earned media, or paid traffic.
• Have a consistent process where you know the outcome of your efforts or dollars.
• Without a predictable acquisition process, you don't have a sellable business.

I STARTED AND SOLD 6 BUSINESSES BY AGE 32...my boring formula.. - YouTube

Replacing the Owner's Role in the Business

• Find someone to replace the owner's role in the business.
• Owners still manage the sales team, marketing, product innovation, and chief decisions.
• Higher-level skills are more expensive to replace.
• Find a VP of sales, director of marketing, and chief product guy to replace the owner's role.
• The business needs to work without the owner.

Transitioning from Self-Employed to Business Owner

• Entrepreneurship involves transitioning from self-employed to business owner.
• Transitioning to a business owner means taking off all the hats and becoming a shareholder.
• Thinking of oneself as a director of the board or chief shareholder is helpful.
• Building a sellable business takes time and effort.
• Recruiting, hiring, managing, and leading people are essential soft skills for running a successful business.

Replacing the Owner's Role in the Business

• Replacing the owner's role in the business is crucial for making it sellable.
• Allocating profit back to the roles that the owner is doing but not paying for is necessary.
• Replacing all the pieces that the owner is doing will make the business more sellable.
• The margin may drop, but the owner will have 100% of their time back and become a true shareholder.
• Replacing the owner's role takes years, not months or weeks.

Attracting High-Quality People

• Attracting high-quality people is crucial for running a successful business.
• Having a long-term vision and being committed to it is necessary for attracting high-quality people.
• Small businesses become big businesses by slowly growing and accommodating more people.
• Significant gross margins and volume are necessary for paying for high-quality talent.
• Hyper-growth and hyperscale require people with pre-loaded solutions and experience.

Hiring People Better Than the Owner

• As the business grows, the owner must hire people better than themselves.
• In the beginning, the owner must hire people who are not as good as they are and train them.
• Later on, the owner can hire people who have some experience and training.
• At multiple eight figures, the people the owner hires are better than they are at everything.
• Hiring people better than the owner is necessary for hyper-growth and hyperscale.

Why Most Businesses are Worthless

• Most businesses sell entirely customized things, making it unscalable.
• Owners are still heavily involved in acquisition and rainmaking.
• Businesses still don't have value even after owners graduate from selling and fulfillment.
• Owners might still be the talking face or spokesperson, making the business have no value outside of themselves.
• Businesses must be sellable to be valuable.

Transitioning from Employee to Investor

• Business owners must make their business sellable to increase the value of equity.
• Transition from employee to self-employed to owner to investor.
• Owners must confront problems and articulate them as solvable.
• Owners must put pieces in place so that the business is sellable and has value separate from themselves.
• Net worth will skyrocket when the business is sellable and produces cash while the owner sleeps.

The Importance of Making Your Business Sellable

• Owners must sell the business, not just the services.
• Transitioning from selling services to selling products increases the value of the business.
• Having a sellable business gives owners leverage in negotiations.
• The guy who needs the deal the least has the most leverage in negotiations.
• Owners must make the business sellable to sell it someday for a lot of money.

The Critical Self-Awareness of Business Owners

• Owners must recruit people and cast the vision of where they want the company to go.
• Owners must quantify the little fractional things they do and put processes around them.
• Owners must hand these processes to people and continue to improve them until they don't have to do anything.
• Owners must get to the point where they don't mind keeping the business because it still cash flows so much money to them.
• Owners must have the critical self-awareness of thinking about what they actually do in the business.

Watch the video on YouTube:
I STARTED AND SOLD 6 BUSINESSES BY AGE 32...my boring formula.. - YouTube