I OWN 6 multimillion dollar companies…this is how I do it…

Summary

• My name is Alex Hormozi, and my portfolio of companies does just under $100 million a year in revenue. I have both majority and minority ownership in various companies.
• Whether you're super passionate about your company or see it as a financial opportunity, structuring it for a potential sale is beneficial.
• As entrepreneurs, we constantly seek to leverage our skills in the marketplace, scaling businesses and progressing from doers to managers to vision casters.
• Transitioning from CEO to owner was a pivotal and challenging shift for me. Making your business sellable—even if you don't intend to sell—can increase freedom and options.
• Starting a second business while running the first was a mistake for me. Functioning as a CEO in both businesses led to unnecessary stress and confirmed that each company needs a full-time CEO to not rely on the owner and to be sellable.
• Differentiating between a CEO role and ownership is crucial. Owners, like Warren Buffett, may not run their companies directly.
• I've structured my engagement with all my companies in the same manner, conducting quarterly meetings and providing strategic advice without taking on operational responsibilities.
• Adopting a "Nose-In, Hands-Out" approach ensures that I don't leave meetings with action items, allowing companies to grow independently of my direct involvement.
• Growing businesses should not depend on your presence. A good test to gauge independence is to appoint a new leader and see if the business still grows after six months without your involvement.
• Communication should be structured to support this independence. I use a separate communication platform for executives from each portfolio company while avoiding daily operational channels like Slack or Asana.
• Ultimately, structure your company as if you'd sell it; it grants more freedom and better serves the business and customers in the long run.
• Your goal should be ownership, not CEO-ship; this mindset leads to long-term thinking and less stress over short-term issues.

Video

How To Take Action

I would suggest focusing on structuring your business for potential sale, regardless of your passion. This positions it for growth, freedom, and options. Transitioning from active CEO to owner is key. Make sure the business can operate without you, signaling long-term stability and increasing its value.

Start by separating your CEO role from ownership. Picture Warren Buffett – he owns many companies but doesn't run them day-to-day. Aim for that model. You want to ensure your business functions and scales without your direct involvement.

Implement a "Nose-In, Hands-Out" strategy where you provide strategic input without taking on daily tasks. Avoid leaving meetings with action items. Instead, schedule quarterly meetings with your leadership team to stay engaged but not entangled.

If you're heavily involved in daily operations like Slack or Asana, gradually step back. Establish a communications protocol where only key executives can reach you, freeing you to pursue owner-level strategies and investments.

Test independence by appointing a new leader and reviewing growth after six months. If the business thrives, it's on the right track. If not, it may still be too dependent on you.

Remember, ownership is the ultimate goal, not CEO-ship. Focus on this, and you'll make better long-term decisions, reduce stress, and maximize the value your business delivers to both customers and yourself. It's a journey toward the freedom many entrepreneurs seek.

Quotes by Alex Hormozi

"I think the entrepreneurial journey is always trying to find the most leverage for our skills"

– Alex Hormozi

"Learning how to structure the business so that it could sell someday was one of the most valuable things that I've done as an entrepreneur"

– Alex Hormozi

"I do like having optionality"

– Alex Hormozi

"The company has to be able to grow and innovate without you"

– Alex Hormozi

"Ownership is the goal, not CEOship"

– Alex Hormozi

Full Transcript

in this video i'm going to talk to you about how to structure the business in order to sell it and why you should do that independent of whether or not you're planning on selling it in the future so hi my name is alex mozi i have a portfolio companies that does just under 100 million a year in revenue we own three outright we have five that we have minority positions in and the reason i make this channel is because lots of people are broke and i don't want you to be one of them if you have a business right now and you're trying to scale it you're trying to grow it there's usually one of two outcomes right either this is a is something that you're super passionate about um or this is an opportunity that you're passionate about because of the you know upside potential of making lots of money there's tons of people who really you know build software companies they're not like super passionate about like data management but they're really good at it and they think there's an opportunity to make money it doesn't really matter to me whatever way you do it is fine but what happens is over the trajectory of the careers of the entrepreneur you know we develop in skill sets we level level up you know first we're doing then we're managing that we're leading then we're casting the vision and you move your way up in the company as the company grows underneath of you as you scale right the thing is is that at some point you know i think the entrepreneurial journey is always trying to find the most leverage for our skills like what's the best vehicle for the skills that we have to capitalize on the opportunity marketplace right and that's the entire market not just within the context of your business but if you were building the company at some point and this i think one of the hardest transitions that i've had to go through and it took me a very long time to do this was transitioning from ceo to owner and you've heard me talk about this before but i'm gonna say it again because i think it's so important independent of whether i planned on keeping the businesses or selling the businesses learning how to structure the business so that it could sell someday was one of the most valuable things that i've done as an entrepreneur and i remember when i started out as like i'm never going to sell this company i'm never going to sell this company like i want to keep these things for life and that may or may not be true but as i've gotten older i will tell you this i do like having optionality and by structuring the company in such a way that i could sell it which i'm going to get to what's what some of those things are in a second it actually enabled me to have more freedom which was the ultimate goal of the business and so the biggest hardship that i've probably enforced on myself was starting another business while i had a business which is probably one of the questions i get most frequently from entrepreneurs was like well you say i should be focusing on stuff but you have all these businesses and the answer is yes and part of that is because i made mistakes and i'm hopefully hoping that you don't have to make the same ones that i did coming up which is i was ceo of one company and then started a second company because i wasn't doing anything in my first company or wasn't going to plan on doing anything in my second company i was like i can be ceo of both terrible mistake it cost me dearly um in time and stress and all the other things that go along with that but being ceo is a full-time role and so unless you are truly the owner of a company and not the ceo then that company still needs you and it means it's a not sellable or sellable for much less because it's still dependent on you as the owner and i remember i used to poo poo this when i was you know earlier on in starting my career i was like i would hear guru say like and maybe it's because i didn't know how to do it but they were like you know if a business can't run without you it's not a real business well i don't think it's not a real business i'd think that you are not an owner if it cannot run without you or you're an owner but you're also a ceo of the company and so for me understanding the difference between ceo and owner was really important because i didn't even have any examples of that right it was only when i started looking at the investor word the wealth world that i understand the difference between those two things and so as an easy example like if you look at warren buffett he doesn't run c's candy he owns these candies right he doesn't run geico he owns geico and he doesn't own you know ben bridges jewelers or whatever it is like he owns it he doesn't run it and so if you think about that within the context of you know your businesses is like is there a way that this business could not only maintain but also grow without my involvement whatsoever so that i could function the same way i do in the stock market as somebody who's in it who owns equity in this company that it grows without me now let me explain how my role works now because i have been able to structure my life so that i actually treat all portfolio companies the same so despite the fact that i have 100 ownership in three of them and i have you know minority stakes in the other five i still structure my engagements with them the same way so i'm still meeting quarterly with those those companies and their leadership teams and i have you know meetings as needed with them throughout and one of the important pieces is that i am nose-in hands out so you can write that one down like niho and i got that from a mentor of mine nose in hands out which means that when we have a meeting or we have a you know a long talk we want to talk about something strategic i don't walk away from the meeting with with with homework i don't walk away with to do's all right and that is a purposeful effort by design because if i had to walk with to do's from all these companies then i would i would never be able to get anything done right and so i go into there as a strategic advisor i'm there to offer my experience but i'm not there to lead the meeting i'm there to bounce ideas off of and the way to make that transition is that you have to build it with that intention so as i've now built businesses later in my career compared to earlier my career my earlier businesses i built independency on myself because i had those interpersonal needs and i also didn't know any better but hopefully if you're watching this you can know better and so this is one of the downsides of having a personality based brand compared to a business that's faceless that's really just a brand in and of itself that's outside of the entrepreneur or owner who started it right sees candies it's not about warren buffett geico is not about warren buffett they have a gecko right and that's the the mascot and so as i've transitioned through this i can tell you that now finally i would say i'm in a position where i actually am an owner and it's awesome it's great these companies pump out cash flow and i can allocate that cash flow accordingly and you know buy percentage of other companies i can get real estate all these other things but it comes from literally being able to do that which means that i either have to bring someone up to operate as ceo so right now your business does not have a ceo and you say that you are passive in it i would probably challenge you on that and say that's not true right the company has to be able to grow and innovate without you if it can do that then it passes my test of ownership right and so i i like to have a certain amount of involvement which i just said like quarterly and you know touch points and things like that but beyond those things the business must be able to operate and grow on its own and a test that i have is that in a six month period after i leave and i put someone else in charge does the company grow during that period of time not only maintain but grow in both top lane and profit unless there was you know some reason they wanted to make some sort of capital investment or whatever but for the most part you can use your own common sense there but that is my litmus test is six months so if i put someone new in and i give them six months does the company grow without my involvement switching to this communication cadence and i think one of the hardest and most significant things that you can do to really remove yourself from that is if you have any sort of central communication for the company so if you have slack or asana or some place that you that you are you know integrally involved you see everything if you can remove yourself from that if you can get off of the company slack if you can get off of the company asana so that no one can have contact with you and you can start a separate communication center which is what we have done with our portfolio we just have one slack that has all of the executives from each of those portfolio companies so they are the only ones who have direct access to us and their teams have access to them directly and that is how we can have far more leverage with the skill sets that we have given the opportunities the marketplace and so the important point here that i want to make is that independent of whether you plan on selling or you plan on keeping your company structuring your company so that you can sell it will ultimately give you the freedom that you want and this was something that i did not do earlier on in my career it's taken me years i mean now over a decade to get to this point and i can tell you i don't think i'll ever build another company again the way i used to and i think part of that comes with skill sets part of that comes with beliefs part of that is character traits that you develop over time but hopefully we can fast track that which is why i'm making these videos for you so i hope you found that valuable um hit subscribe if it was for you i'm trying to help entrepreneurs who are trying to scale their companies and just kind of show you the lessons that i've learned along the way the the key point is ownership is the goal not ceo ship and if we can act as owners i think we make better long-term decisions you are far less stressed about short-term nuances in the business because you have a much more long-term outlook and ultimately i think it actually better serves the business in the long run um in terms of the value that it creates for its customers so and honestly the value that the business creates for you in your life which i think most of us wanted freedom and it takes a long time to get here so anyways hope that was valid before you leave a comment if you like uh stuff like this and if you have other questions around these topics and stuff i love talking about um and i just want to make stuff that you thought you know that's useful for you so anyways lots of love and i'll see you next video