Verkauf für 20 Millionen? Hormozis ehrliche Einschätzung

0:00Unternehmer/Gast Uh, I have a dance school, two locations. >> Wonderful. >> Uh, we do 2.7 mil and thank you. Uh, I've been in 5 years in business, so aiming for 3 mil this year and at least 10 plus in the future. Constraint will be space capacity facility space. >> Heard. >> So, yeah. >> Okay. >> you like to know? >> [laughter] >> Well, is that is that just what's stopping you? Is just getting another location?

0:23>> I could do if I can get to 3 million this year, I'll be at probably 80% capacity running my core programs. >> Okay. >> Right, which is the key. Um, I could add daytime. There's things I could do on the side, but it's not priority. Right. >> So, next step in scaling at that point is is it additional locations or acquiring dance studios? >> I don't want to franchise. I think it's either acquiring studios that are already that people want to retire from and buy them out and run their their businesses and then sell the whole thing eventually or ground up organic build from location location.

1:00>> [sighs] >> So, do you want what you want to hear or the truth? >> Both. No, choose. I want the truth. >> you want to exit? You said yeah, so and when you say okay, what size exit? >> At least 20 mil. >> Yeah. So, the fun fact for everyone here, the hardest amount of money to sell for is between 10 and 30 million. Because it's just not big enough for people who have real money and it's too big for people who don't have real money.

1:26>> Interesting. >> And so, uh, like it's easier to get like a hundred million dollar deal done than it is to get a 25 million dollar deal. 25 million dollar deal is like the one of the hardest deals to get done because it's somebody who usually has a way bigger checkbook and is just like really scraping down the bottom and doesn't really care cuz it barely moves the needle for them. >> Interesting. >> Um. Just for context. Now, that being said, if you want to sell for more, the difficulty of selling your particular business is that it's so people driven.

1:53It's so talent driven. >> Yes. >> Um, and there haven't really been to my to my standard any super successful high service based gym businesses. The closest one for a period was Orange Theory, and then they went to [ __ ] during COVID and never recovered. But like they were the closest ones. And it's just because it's the talent. It's just it's such a service heavy business, and it's so reliant on the quality of the trainers, coaches, instructors, whatever you use the word you use, right? Um So selling it will be difficult. You would be able to sell it to somebody who doesn't know what they're doing um, for sure, but you're not going to get a huge amount of money for it. So some doctor who has no idea about business but think he does cuz he has money, um, would buy it. Uh, but you're probably like you might get you know, it would be 10 with a bunch of hair on it and earn, you know, clauses and a bunch of crap. So if you wanted to just do this forever, then I'd say like just keep going.

2:50That's amazing. That's fine. Um but most people make this work in a franchise model. Typically, I think the I mean you can get gyms for free. Studios for free. Like that like that's that's not It won't be hard for you to find, you know, ballet, dance, etc. Um, locations cuz so many people are in pain and don't want to run them. Like you could get them for free. I mean that's how I expand like I got them for free. Um So the good news is the business is good.

3:19It's just what is your expansion path? So either M&A, de novo meaning organic growth, you open it yourself, or you go from like a franchise path. The franchise and or licensing, um is for sure more sellable than those ones. And I don't normally give this, um, advice. The issue is just that I know I understand the nature of the business obviously pretty well. Um, they're very hard to sell for a lot of money. You can offload them really easily.

3:45>> [laughter] >> Cuz somebody else has a dream and thinks that they're going to make it work. It's like restaurants. Like you can sell them for nothing cuz somebody else has is a cook and people tell them their cooking is good and they're like, "Oh, you should open a restaurant." Like, you love fitness, you should start a Like, that it's very easy to get people to say yes. Not for a lot of money, though. So, my my honest truth is, I think if you look at your current business model and say, "How could I cut down the complexity by 80%?" And then franchise it.

4:11So, I'll give you I'll tell you a story. So, um the most successful fitness franchise um right now is Alloy. They do semi-private training. Rick Mayo is really good friend of mine. Um he had a $4 million a year single facility. And they had smoothie bar, merch, PT, semi-private, large group. They had the whole They had everything, right? And when he went to franchise, he looked at revenue per square foot across all the business units and saw that semi-private was by far the highest revenue per square foot. So, he had his 6,000 whatever square foot facility. He fired all of his clients except for his semi-private. It was still profitable with a 6,000, you know, square foot lease, opened up a pilot location with only the most profitable service that had three employees, one manager that does mornings and evenings and does sales, and then an assistant that does morning, an assistant that does does evenings and works back up. And so, with the three-person model, does five or six hundred dollars a year 50% margins, and you can just cookie cutter that thing.

5:09Alex And so, I think your instinct on the front end with stuff like I could add all these things, I think is 100% right not to do that. And then look at your most profitable times, take your most profitable pricing and packages, and then I would look at stripping this down to like, how could I get this to the fewest possible people who could run this so that I could open up Basically, somebody else could do this. >> Right. >> And that's probably the Like, that is the most likely path to the goal that you have. I'm not saying it's easy, but it's the most likely path to where you want to go.

5:34>> Yeah. And what about the licensing? >> Same same, just different different legal structure. >> Okay. >> Yeah. >> All right. >> Just being real. Like, I mean, you could obviously open more locations. Seems like you're competent. Um I say this as a compliment. Uh but if you want the if you want the exit that you're looking for, like I can't I mean I know a lot of people in the fitness world who have five locations, 10 locations. So few like almost every one of them did never sold the whole thing. I don't know one who sold the whole thing. Every one of them piecemealed it one to a trainer, one to a customer, one to a competitor, one like they had to break the whole thing up when they got tired.

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