Businesses grow, and expand, but without the proper framework to do so, they can quickly collapse in on themselves. Alex Hormozi, the founder of Acquisitions.com, has seen it all and guided many businesses toward sustainability in scaling. He founded seven enterprises and aims to help smaller companies find their footing as they grow. This is what he’s learned through his life as an entrepreneur.
Everyone Starts Small
Alex’s early life was spent as a first-generation Iranian-American trying to find his place in the business world. He started just like most of us, working a 9-to-5 after his graduation, but he quickly realized he wanted more out of life than his job could give him.
It wasn’t a bad job either. Alex has graduated Magna Cum Laude from Vanderbilt University and had a 3-year degree to his name. He landed a fantastic job as a management consultant for a boutique strategy firm. The job didn’t offer him the kind of growth he wanted.
Building a Dream
Alex said that around 2013, he had the idea of opening a brick-and-mortar gym. He was always a bit hyped on fitness and felt like this was an excellent way of leaning into his passions.
At first, it was one gym, but within the next three years, he’d expanded to take up three different locations with his gyms. By the time he sold the gyms two years afterward, they generated five figures in income for him. Scaling, it seemed, was something he was good at.
Selling His Strengths
In the following years, Alex would find over thirty business ventures in a variety of industries, turn them around from near failure, and sell them after turning them into profitable ventures. He used the same model with the gym, which worked out spectacularly well.
With so much practice, Alex was ready to build his model into a system. He knew it worked in multiple industries and with different earning models, so it was just about codifying his experiences. He licensed his growth model and exported it to other entrepreneurs, taking up over 4,000 locations across the country over the next four years.
Becoming a Venture Capitalist
Alex’s greatest disappointment during this time was losing the teams he had worked so hard to help build. Every time he sold a business, the team that was with him building from the ground up went with the company. He didn’t like breaking those ties and decided to look at a new way of doing things.
In 2020, Alex founded Acquisition.com, investing the wealth he earned from flipping other businesses into smaller companies he saw promise in. With his investment and his plan, he could take them from a small company into something more massive in size and scope.
Becoming an Author to Spread His Ideas
Alex knew many people could benefit from what he discovered, but getting that idea out to the public would take something remarkable. The book $100M Offers: How To Make Offers So Good People Feel Stupid Saying No is a testament to his methodology and should be required reading for founders.
The lessons he learned scaling over a thousand businesses helped him to become an expert in what works and what doesn’t. Over the years, he has put these lessons to work, giving him insight into what businesses should do if they want to snowball.
Find The Right Niche
Businesses all have a niche they fall into. That niche defines their industry, products, and their target demographic. Alex says choosing a niche is the number one reason for businesses not meeting their potential and eventually failing.
Choosing the right niche helps the business streamline its core service offerings and gives it options for products and services. Alex’s first task in acquiring a business is to see if the company serves its niche. He uses other successful businesses in the niche as a template and looks at what they do right. There’s no reason to reinvent the wheel when someone else has done it already.
Optimizing Flows Within the Business
The next thing Alex looks at is how optimal the business is. This isn’t just about the production process; it also considers the marketing factors. Is the product easy for the user to find and buy? Is there a way for the business to offer more and sacrifice less?
Alex says that while making a business more efficient seems like a good idea, many people overlook it. Once a company is in the right niche and has its messaging down, there’s no reason it shouldn’t be making money. Efficiency ensures that all the excess is trimmed so the company is running hot all the time.
Finding The Right Pricing
Economics is based on prices, and people won’t buy a product they think is over costed. One of the significant failings a lot of businesses have is choosing pricing based on their own perspective as opposed to their buyers. The way a company values a product may be vastly different from how its buyers see it.
For a business to succeed, it needs to find the pricing the market will pay for a product. Overpricing the product may seem like a good idea for a short-term profit, but it severely impacts the long-term profitability of the business. Instead, the company should under cost the product, overdeliver, and offer premium add-ons to enhance the product.
Sweetening the Pot
Alex also underlines the importance of adding extra for clients’ satisfaction. Overdelivering on the clients’ expectations ensures they’ll keep returning to the company since they get so much value for the money.
However, along those same lines, enhancing the offer through guarantees or bonuses ensures that the buyer always feels like they’re getting more for their money. A money-back guarantee, for example, suggests the buyer can just return it if they’re unsatisfied.
Growing a Business Takes Effort
One thing Alex includes in his discussions is the amount of effort it takes to build and scale a business. He can only give you the blueprint to get to where you want to go. The effort is all on you. It’s not an easy road getting there, but it’s a fulfilling one.
