I am 29. My business makes me $2m in income a year. What next?

[yungmillionaire]

Hi everyone.

Grateful for this community here. I first created an account here almost 6 years here with the dreams of becoming a millionaire. That dream is now achieved but I am thinking of what to do next.

Context:
-I am 29. I founded a business 4.5 years ago in the online education space.
-Got lucky and made a killing during COVID, made around $10m in profit a year.
-Profit is now reduced to around to $2m a year, but business is very stable.
-I own 100% of the company so all profit essentially goes to me.
-I am the CEO and run a team of around 30 people.

Fast-forward to today, I want to take myself out of this business and start other ventures. Although the business is still profitable and makes me $2m a year in income, I am getting rather tired of doing the same thing day in day out. I have the entrepreneurial itch and crave the thrill of doing other ventures.

I operate in an extremely niche space, so it is impossible to sell the business.

Hence, I am thinking of hiring a CEO, giving him equity, then myself taking a step back to become Chairman instead. But it is extremely difficult to find a CEO. Even if I do manage to find one, how do I structure his remuneration in terms of equity + salary?

My question is: what do I do next?

 

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[Roli]

Hi everyone.

Grateful for this community here. I first created an account here almost 6 years here with the dreams of becoming a millionaire. That dream is now achieved but I am thinking of what to do next.

Context:
-I am 29. I founded a business 4.5 years ago in the online education space.
-Got lucky and made a killing during COVID, made around $10m in profit a year.
-Profit is now reduced to around to $2m a year, but business is very stable.
-I own 100% of the company so all profit essentially goes to me.
-I am the CEO and run a team of around 30 people.

Fast-forward to today, I want to take myself out of this business and start other ventures. Although the business is still profitable and makes me $2m a year in income, I am getting rather tired of doing the same thing day in day out. I have the entrepreneurial itch and crave the thrill of doing other ventures.

I operate in an extremely niche space, so it is impossible to sell the business.

Hence, I am thinking of hiring a CEO, giving him equity, then myself taking a step back to become Chairman instead. But it is extremely difficult to find a CEO. Even if I do manage to find one, how do I structure his remuneration in terms of equity + salary?

My question is: what do I do next?

First of all, well done on your success.

We're all different, but if I were you I would sell the business and concentrate on doing stuff that made me happy. Perhaps education makes you happy, so do more of that. If it doesn't find what does, you literally can do anything you want.

 

[Fox]

Hit me up if you are interested in talking, I have a fair bit of experience in the space.

Have you thought about also making any kind of software product, clothing, physical product, scalable community?

If you still have the audience maybe there are other ways to take the business.

 

[yungmillionaire]

First of all, well done on your success.

We're all different, but if I were you I would sell the business and concentrate on doing stuff that made me happy. Perhaps education makes you happy, so do more of that. If it doesn't find what does, you literally can do anything you want.

Thank you very much.

I operate in an extremely niche field so it is impossible to sell the business.

So I guess my only option now is to hire a General Manager or CEO to take over me and run the business.

 

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[Simon Angel]

Thank you very much.

I operate in an extremely niche field so it is impossible to sell the business.

So I guess my only option now is to hire a General Manager or CEO to take over me and run the business.

Yeah you've essentially made enough to last you a lifetime or two already, so I'd delegate my work to a hungry CEO and focus on what makes me happy. If you've ever wanted to travel or become an actor or whatever, you're young and rich, so go ahead and do it.

And if you want to start a new business and that's what you find meaning in, then the process is still the same.

If you're doing 2M in profit then paying 10-15% of that to someone who takes that weight off your shoulders seems like a good idea. Heck, I'd pay them double that if it meant freeing up my time to do something else.

 

[Roli]

Thank you very much.

I operate in an extremely niche field so it is impossible to sell the business.

So I guess my only option now is to hire a General Manager or CEO to take over me and run the business.

Why impossible? Surely a credible investor being presented with a two-million-a-year business would be interested?

There are companies who will help you find a buyer. They'll take a commission, you'll have a pot of cash and freedom to do what you want.

That's the whole point isn't it? Freedom. Don't let your success shackle you, if you want out, get out. If you want to hire a GM, do that.

It's an interesting quandary, keep us posted.

 

[yungmillionaire]

Yeah you've essentially made enough to last you a lifetime or two already, so I'd delegate my work to a hungry CEO and focus on what makes me happy. If you've ever wanted to travel or become an actor or whatever, you're young and rich, so go ahead and do it.

And if you want to start a new business and that's what you find meaning in, then the process is still the same.

If you're doing 2M in profit then paying 10-15% of that to someone who takes that weight off your shoulders seems like a good idea. Heck, I'd pay them double that if it meant freeing up my time to do something else.

Appreciate your thoughts.

I agree - after making some money and doing the same thing for 4.5 years, I've slightly lost the hunger to continue for this particular business. I need to hire a hungry CEO and focus on other things.

Giving away 10-15% equity makes sense. However, I think finding a CEO is the hardest part. How do I even begin to find one?

 

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[yungmillionaire]

Why impossible? Surely a credible investor being presented with a two-million-a-year business would be interested?

There are companies who will help you find a buyer. They'll take a commission, you'll have a pot of cash and freedom to do what you want.

That's the whole point isn't it? Freedom. Don't let your success shackle you, if you want out, get out. If you want to hire a GM, do that.

It's an interesting quandary, keep us posted.

Thanks for your input!

I never thought of engaging a third party company to connect me with a buyer. Perhaps I will explore that.

If I can't sell, then I will hire a GM.

Don't let your success shackle you, if you want out, get out.

Appreciate these words of wisdom.

 

[empiricalwriter]

Appreciate your thoughts.

I agree - after making some money and doing the same thing for 4.5 years, I've slightly lost the hunger to continue for this particular business. I need to hire a hungry CEO and focus on other things.

Giving away 10-15% equity makes sense. However, I think finding a CEO is the hardest part. How do I even begin to find one?

First off.

Congrats on your success.

If I'll suggest about you finding a CEO.

I think you can list the requirements you'd want from the type of CEO you seek to work with.

Drop the requirements here on fastlane, and the people who fit in, or know those who fit in, would certainly reach out to you.

Since there are reputable people here, who have experience, skills and have managed some kinds of businesses, you may find a solid CEO here.

Who knows?

I wish you success in your future endeavors.

 

[yungmillionaire]

First off.

Congrats on your success.

If I'll suggest about you finding a CEO.

I think you can list the requirements you'd want from the type of CEO you seek to work with.

Drop the requirements here on fastlane, and the people who fit in, or know those who fit in, would certainly reach out to you.

Since there are reputable people here, who have experience, skills and have managed some kinds of businesses, you may find a solid CEO here.

Who knows?

I wish you success in your future endeavors.

Thank you for your kind words.

Likewise I wish you the best in your future endeavors.

 

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[Simon Angel]

Appreciate your thoughts.

I agree - after making some money and doing the same thing for 4.5 years, I've slightly lost the hunger to continue for this particular business. I need to hire a hungry CEO and focus on other things.

Giving away 10-15% equity makes sense. However, I think finding a CEO is the hardest part. How do I even begin to find one?

I had a client who asked me to take control of their business a couple of years ago. I was managing one of their marketing channels for them but also helping with their overall sales strategy and managing their employees on the side as part of maximizing the results for the whole business.

In short, I was doing more than was agreed on because it irked me that some people were slacking and it was affecting the overall results (that I get paid for).

At some point, my client approached me and said "Look, I don't want to do this anymore and I want someone responsible and hungry to take control. Someone who I trust. I'll pay you a big percentage of the profit, provided you're interested."

Ultimately, I declined, but I think he had the right idea. So see if you have any proactive team members who are hungry for success that you can give this opportunity to.

 

[cmh]

Congrats on this success -- it's really outstanding that you were able to build this at such a young age.

Do you have employees you can promote from within? Perhaps none are ready to take the CEO reins and be "the guy" yet, but maybe over the next 24 months you can slowly offload all of your responsibilities, starting with the most onerous ones first.

That's what I'm doing right now... just slowly offloading my work to others. I offer them the chance to buy into the company as well. I'm ten years your senior, so time is ticking a bit faster for me, but still not too bad. Good luck.

 

[MTF]

Dude, if your business is making $2 million per year and it's as stable as you say it is, you can sell it for $6-8 million and be done for life.

I'd sell it, invest at least half of it into boring passive assets (like dividend stocks) and then do whatever you want with the rest.

You may hire a manager but he may just as well run the business into the ground.

I'd take the guaranteed $6-8 million every day over the risk of hiring a wrong manager who will ruin your business.

Reach out to business brokers like Empire Flippers, FE International, or Quiet Light.

 

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[yungmillionaire]

Congrats on this success -- it's really outstanding that you were able to build this at such a young age.

Do you have employees you can promote from within? Perhaps none are ready to take the CEO reins and be "the guy" yet, but maybe over the next 24 months you can slowly offload all of your responsibilities, starting with the most onerous ones first.

That's what I'm doing right now... just slowly offloading my work to others. I offer them the chance to buy into the company as well. I'm ten years your senior, so time is ticking a bit faster for me, but still not too bad. Good luck.

Thank you for your kind words.

Unfortunately, I don't have any employees that are capable for this role. In the ideal scenario I would promote from within, because that person would already be familiar with the business. I don't have any good candidates, hence I am left to source for a GM/CEO externally.

I am thinking a good way to structure it would be - hire a GM (salary only, no equity) and put him on probation for 6 months. If he performs well, promote him to CEO and give equity (10-20%).

Wishing you the best and I hope you find the right people to take over your business.

 

[MJ DeMarco]

I agree - after making some money and doing the same thing for 4.5 years, I've slightly lost the hunger to continue for this particular business. I need to hire a hungry CEO and focus on other things.

Why not sell the company? At $2M profit, you should be able to get a pretty price; a 4X that's $8M.

Put the business behind you without any mental baggage.

If you still hold a role (Director, Investor) the mental baggage remains.

 

[John Clancy]

@yungmillionaire you've gotten good advice on this thread so far.

If you'd like to discuss the particulars of your situation with someone who runs a similar kind of business (industry + size-wise), you might like to check out Olly Richards: Homepage - Olly Richards

He runs an online language learning business called StoryLearning that - apparently - turns over $10 million a year.

He started building his personal brand last year. Free newsletter + social content for audience aggregation, then monetised with occasional offers for low-ticket workshops ($100/ticket) and coaching on the backend.

You're in the best position to judge how much support you need, so maybe that's not a fit. But if nothing else, it's probably worth a look.

If you do end up taking action on any of the advice shared in this thread, feel free to post + share your results - I'm sure everyone here would be interested to hear how it goes.

Best of luck!

 

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[MakeItHappen]

@yungmillionaire you've gotten good advice on this thread so far.

If you'd like to discuss the particulars of your situation with someone who runs a similar kind of business (industry + size-wise), you might like to check out Olly Richards: Homepage - Olly Richards

He runs an online language learning business called StoryLearning that - apparently - turns over $10 million a year.

He started building his personal brand last year. Free newsletter + social content for audience aggregation, then monetised with occasional offers for low-ticket workshops ($100/ticket) and coaching on the backend.

You're in the best position to judge how much support you need, so maybe that's not a fit. But if nothing else, it's probably worth a look.

If you do end up taking action on any of the advice shared in this thread, feel free to post + share your results - I'm sure everyone here would be interested to hear how it goes.

Best of luck!

Nice share. Do you know any other entrepreneurs with good content for entrepreneurs in the online education space?

 

[Johnny boy]

I'll put someone in charge, pay them 100k, and you and me can split the profits. You can move on to anything you want or live like a retired person.

 

[App88]

Why not sell the company? At $2M profit, you should be able to get a pretty price; a 4X that's $8M.

Put the business behind you without any mental baggage.

If you still hold a role (Director, Investor) the mental baggage remains.

Completely agreed! It's a no brainer exit out at 4x and have a piece of mind.
If you carry on with hiring a CEO you would still have baggage, like MJ said, of 'what ifs'. What if CEO is a bad leader and company will go in wrong direction, what if I don't set the standards and hold everyone accountable since I am 100% passive and have no involvement.

 

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[amp0193]

Giving away 10-15% equity makes sense.

You don't need to give up that much.

You're netting $2M a year. Pay the guy a real nice salary, and dangle a few % in equity for hitting whatever targets you set. Or forget the equity altogether and just put a nice bonus structure in place.

Equity not so exciting if the company is impossible to sell, as you say.

 

[Kak]

Hi everyone.

Grateful for this community here. I first created an account here almost 6 years here with the dreams of becoming a millionaire. That dream is now achieved but I am thinking of what to do next.

Context:
-I am 29. I founded a business 4.5 years ago in the online education space.
-Got lucky and made a killing during COVID, made around $10m in profit a year.
-Profit is now reduced to around to $2m a year, but business is very stable.
-I own 100% of the company so all profit essentially goes to me.
-I am the CEO and run a team of around 30 people.

Fast-forward to today, I want to take myself out of this business and start other ventures. Although the business is still profitable and makes me $2m a year in income, I am getting rather tired of doing the same thing day in day out. I have the entrepreneurial itch and crave the thrill of doing other ventures.

I operate in an extremely niche space, so it is impossible to sell the business.

Hence, I am thinking of hiring a CEO, giving him equity, then myself taking a step back to become Chairman instead. But it is extremely difficult to find a CEO. Even if I do manage to find one, how do I structure his remuneration in terms of equity + salary?

My question is: what do I do next?

Congrats on the business!

Like any deal, decide what makes financial sense to you. If it syncs up with what makes financial sense to a potential CEO that you could get excited about, a deal will progress.

Structure could be anything. It's not a set of best practices or anything at this point.

Best of luck finding someone for the position. Taking a step back from being the CEO to being an owner is a great step.

 

[Kak]

By the way, I see a lot of people telling you to just sell it.

I see it as an opportunity to put someone dynamic at the helm that grows it for your benefit while you aren't looking. This forum is all about you being your best investment when we are talking about $20k, but now that it's a few million dollars everyone starts talking about investing it in the shit show.

Trust yourself more than the shit show. Trust the asset you built more than a panel of dickbeats at the basket of public companies trying to appease the most obnoxious 5 percent of people in society.

I see no issues with your strategy, and will likely employ it with my current business at some point when I would rather be an entrepreneur again.

For those that cry risk... It's certainly not riskier than giving up control of your investment to the best a$$ kissers in the world.

Treat the interview process like an angel investment. Make applicants come up with a solid growth strategy. See if there's something you can be excited about.

 

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[Antifragile]

Hi everyone.

Grateful for this community here. I first created an account here almost 6 years here with the dreams of becoming a millionaire. That dream is now achieved but I am thinking of what to do next.

Context:
-I am 29. I founded a business 4.5 years ago in the online education space.
-Got lucky and made a killing during COVID, made around $10m in profit a year.
-Profit is now reduced to around to $2m a year, but business is very stable.
-I own 100% of the company so all profit essentially goes to me.
-I am the CEO and run a team of around 30 people.

Fast-forward to today, I want to take myself out of this business and start other ventures. Although the business is still profitable and makes me $2m a year in income, I am getting rather tired of doing the same thing day in day out. I have the entrepreneurial itch and crave the thrill of doing other ventures.

I operate in an extremely niche space, so it is impossible to sell the business.

Hence, I am thinking of hiring a CEO, giving him equity, then myself taking a step back to become Chairman instead. But it is extremely difficult to find a CEO. Even if I do manage to find one, how do I structure his remuneration in terms of equity + salary?

My question is: what do I do next?

Love this post.

1. Success achieved at under 30. Amazing.
2. Having an itch to do more, other ventures! Excellent.
3. The current challenge is how to get complete time freedom from your own business…

Most of the forum doesn’t run a team of 30 or even 3. Most are at the “I’d like to get my business off the ground”. It’s natural that most will write advice of “find a way to sell it”. And you know what, nothing wrong with it either. But I assume you weren’t just “got lucky and make a killing” - you were actually good. This means that you probably know that selling your business is going to be difficult. Regardless, what you want matters more - you want to find a CEO and asking for how.

I have some bad news for you. Most people, even some entrepreneurs aren’t CEO… your challenge is absolutely NORMAL.

But it doesn’t mean you should be involved in the day-to-day like you describe, doing the same thing over and over again.

Become the CEO that has free time. Do it that way and finding a new CEO will become a walk in the park.

Let me put it another way, if you can’t step away from your business, you are not there yet. You should be able to disappear for a month and nothing changes.

As far as new ventures go, it’s not as easy as one would think. Having an existing business to fall back to makes it easier to experiment.

Lastly, in your mind and your heart you probably know what to do… follow that gut feeling.

Cheers,
AF

P.S. I love having a good team and a thriving business. Selling it would make me sad, but maybe I am weird that way on this forum. My only focus is on the next 10x and it excites me. What excites you?

 

[srodrigo]

Unless I see genuine potential for much more than $2M, I'd sell and not worry about money again. Probably start something else if I've got the itch. But I'd mainly do the things I want to do, now without any constraints.

 

[yungmillionaire]

I would like to express my gratitude to each and every one of you here for the responses.

My thinking has always been that it's impossible to sell to a bigger player because the business is so niche. This thread has opened my thinking to selling to an investor or fund instead.

Since the thread started, I've reached out to a PE fund and have already secured an interview with them.

To those that have successfully sold your businesses, any advice? Anything from investor outreach to negotiating terms, I'd appreciate any insight!

 

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[Ronak]

I would like to express my gratitude to each and every one of you here for the responses.

My thinking has always been that it's impossible to sell to a bigger player because the business is so niche. This thread has opened my thinking to selling to an investor or fund instead.

Since the thread started, I've reached out to a PE fund and have already secured an interview with them.

To those that have successfully sold your businesses, any advice? Anything from investor outreach to negotiating terms, I'd appreciate any insight!

Nice start with the PE fund. There are hundreds more out there.

You'll have to decide what your main goal is: maximizing price or speed.

For price, I'd look for a niche investment bank/M&A firm that specializes in your industry. They will be able to engage a bidding process, screen buyers, and help with the due diligence process, all of which can take awhile. Keep in mind that during this time, the business will still have to be run, so your workload will actually increase in the short term. At higher levels, it's not unusual for the buyer to want you to stick around in some capacity post-sale.

If it's a quick sale with less fuss that you're looking for, you will likely have to sacrifice price for a shorter due diligence period and the ability to walk completely away.

Congrats on your success, hope you'll share your story of how you got to where you are with the forum!

 

[philliptembo]

I would like to express my gratitude to each and every one of you here for the responses.

My thinking has always been that it's impossible to sell to a bigger player because the business is so niche. This thread has opened my thinking to selling to an investor or fund instead.

Since the thread started, I've reached out to a PE fund and have already secured an interview with them.

To those that have successfully sold your businesses, any advice? Anything from investor outreach to negotiating terms, I'd appreciate any insight!

Yung millionaire,

I'm happy you have found insights in what next with your business..

I'd like to chat about teaming up to provide a for-profit water bottling company in africa. Think liquid death but on a smaller scale...

Is such a venture within your fresh start realm?

 

[Kevin88660]

Hi everyone.

Grateful for this community here. I first created an account here almost 6 years here with the dreams of becoming a millionaire. That dream is now achieved but I am thinking of what to do next.

Context:
-I am 29. I founded a business 4.5 years ago in the online education space.
-Got lucky and made a killing during COVID, made around $10m in profit a year.
-Profit is now reduced to around to $2m a year, but business is very stable.
-I own 100% of the company so all profit essentially goes to me.
-I am the CEO and run a team of around 30 people.

Fast-forward to today, I want to take myself out of this business and start other ventures. Although the business is still profitable and makes me $2m a year in income, I am getting rather tired of doing the same thing day in day out. I have the entrepreneurial itch and crave the thrill of doing other ventures.

I operate in an extremely niche space, so it is impossible to sell the business.

Hence, I am thinking of hiring a CEO, giving him equity, then myself taking a step back to become Chairman instead. But it is extremely difficult to find a CEO. Even if I do manage to find one, how do I structure his remuneration in terms of equity + salary?

My question is: what do I do next?

You are someone who built a multi-million dollar business within a few years in your space.

If you don’t know how to find someone to be the CEO or sell your business in your niche space, 99 percent of the forum members here don’t know any better.

Online education is not capital intensive. I think the risk of not selling is not high also.

The way to think about it is if you have zero revenue suddenly how much much money you are losing per month. If that figure is low relative to your annual net profit there is enough time for you to scale down your risk to close the company for good.

 

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[MJ DeMarco]

To those that have successfully sold your businesses, any advice?

Avoid "earn outs" as part of deal terms. In fact, make any mention of an "earn out" as a deal-killer.

It's cash, or stock which can be immediately liquidated or traded on a stock market.

If you don't know what an earn out is, here is ChatGPT's bloated definition:

 

[RightyTighty]

Rule #1: This is your livelihood so make sure you protect it.

The balancing act is to find that unicorn with the required aptitude, drive, and sense of agency - you essentially want something akin to a clone of yourself who can run the business as well as you can (or even better!). The last thing I’d do is give away part of your business to an unproven entity. Why not hire someone as a COO with the understanding that he “may become CEO at some point”? Then you can either promote him in a few months or tell him it just isn’t working out, and start the process over with a new candidate. Find someone with the business background to make a good CEO and immediately start grooming them for that position while they learn the ropes by being the COO. This will allow you to vet them for the position, and hopefully instill your values and business philosophy before you hand over the reins. Oh, and when you find your candidate pay someone to do a deep dive background check on them. Promote them as soon as you’re comfortable putting them in the CEO position. Even then, I’d put them on a profit sharing plan without equity. After a few years perhaps equity could be discussed.

More importantly, what is your endgame for the business? Unless you’re planning to let this individual slowly buy you out, why would you ever give him equity unless he won’t stay without it? Doing so would only muddy the water if an opportunity to sell arises down the road. If you can find your unicorn, what you do want to do is make sure he never leaves, which usually involves some form of golden handcuffs. If you can arrange a profit sharing plan that’ll do this without making him so flush that he loses his edge that would be ideal. If he’s savvy he will push hard for equity; if that’s the case negotiate as needed to keep him on board. Just my two cents.