The Game with Alex Hormozi
Throwback: How I Made My First Million (In Profit) | Ep 858
Wed, 26 Mar 2025
Wanna scale your business? Click here.Welcome to The Game w/ Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition Mentioned in this episode:Get access to the free $100M Scaling Roadmap at www.acquisition.com/roadmap
Chapter 1: How did Alex Hormozi make his first million?
Welcome back to the game. Today, I talk about how I made my first million. And the big difference was focus, honestly. There was a clear transition point in my life where I went from doing business, and I've been doing this for years, and becoming a, I mean, crazy to say this, but a millionaire. It seems so cringe to say it. I think even saying cringe is cringe now.
I think it's like old people stuff now. Anyways, how I made my first million and there were significant changes in my behavior. And this podcast zooms in on that exact moment and the shift in behavior and then the resulting outcome. And I think you'll probably be able to take one, two, maybe more things from this episode that could potentially help you out.
I want to talk to you about how I made my first million dollars in profit. Mind you, the reason that I'm so big on profit rather than revenue is that at that point, I had already made, you know, I was already making a couple million dollars a year between all the different things that I was doing, but I was taking home basically nothing.
Because I was so spread thin, I wasn't paying attention to profit, I was just looking at revenue, trying to beef myself up and feel status rather than thinking about what I was actually taking home. And I told you in a different video how I got in a head-on collision in a DUI at 60 miles an hour on the highway and walked away from it.
And that was kind of the catalyst that ended up changing my life in a lot of ways. Mostly because I decided to confront decisions that I had been putting off and make hard calls that I didn't want to make to force myself to focus on one thing.
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Chapter 2: What life-changing event influenced Alex's focus on profit?
And so what I want to do in this video is talk to you about the result of that decision and what kind of happened and transpired in the next six to 12 months, which is anything but a Cinderella story. I made the calls. I went all in on gym launch. I basically fire sold my other businesses. And just as a quick tangent on that,
like a lot of times i think the great thing that we have is sitting right in front of us after we let go of the things that are holding us down i'm a big believer in the theory of constraint which is uh you know a system will grow to up to it's basically its bottleneck right and then until you relieve that like systems will grow as long as they're not constrained and so most of us are constrained in many ways and we just do not recognize them which is why we have things called limiting beliefs it is a constraint right and for me in a very real way i had constraints in terms of
um, all the different things that I was allocating my attention to. I had, you know, I think literally like nine or 10 business businesses, I'll use quotes here, um, that I was trying to run at the same time. And I was spread so thin that I could barely allocate anything. And I was working every hour of the day and I was drinking half a bottle of Johnny Walker at night. So I just go to sleep.
And so anyways, I, I got in the head on collision. I, uh, I decided to make the next, uh, the next move, which was going all in on gym launch. And this is, uh, the beginning of yet another hard road ahead. Um, and so at this time, for those of you don't know, I started flying around and doing, done for you gym launches.
And so what that was, was basically Layla and I would go and do a gym turnaround. I didn't like to use that word because I didn't think gym owners liked it. I was originally going to call it gym rescue, but no one wants to be rescued. So I called it gym launch and everyone was okay with that name. We would fly out to brick and mortar facilities. We'd sit at the front desk.
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Chapter 3: What was the turning point in Alex's business strategy?
I would spend my own money on everything. So the offer was pretty simple. I said, I would fill your gym in 30 days for free. That was the offer. And I was like, I'll spend my own money on the ads. I'll spend my own money on the hotels, the food, the everything. And the deal is I just get to keep the upfront cash that I collect. And then everything afterwards that's contract value, you get to keep.
It was a pretty compelling offer, right? They didn't have to do anything, right? They would just say yes. And then I would show up. I think I had to ask them for $500 to reserve the date just to make sure that they wouldn't like not be there. But I made it a refundable deposit. But anyways, I would fly out and...
we would spend all the money in marketing and we would sell on average when Layla and I would go, we'd sell on average about 200 people in 21 days. So we'd average about 10 sales a day. Um, and then we would take, you know, then we'd fly to the next one.
This is kind of what we had been doing in 2016 and I was doing this while also having six gyms and two agencies and, and, and, uh, all these other things that were going on and I was spread wildly too thin. And that's when I got in the DUI and then decided to end everything except for gym lunch. We ended up basically
I sold five of the six gyms, I shut down the two agencies, and then I had one gym that was left over. And I put the money from the sale of those other businesses, which was not a lot, into kind of the last facility. The partner that I had at that facility ended up feeling like I had been taking distributions somehow from the business, which I hadn't.
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Chapter 4: How did Alex manage multiple businesses before focusing on one?
And then he took what he believed was rightful compensation for him not being involved in that gym anyways, and basically took the rest of the money out of the account. And so I basically was left with nothing. So I was truly at this rock bottom moment of just got into DUI. I just got rid of all my gyms. I put all the money from those gyms into this last facility. That money got taken.
And I then decided to close that one gym down. And then when I did that, I couldn't sell anymore at that facility to generate cash flow because I wanted to close it down. I didn't want to be involved in that gym anymore. And so I basically stomached rent and payroll out of there with no new cash flow coming in. And I watched my bank account basically go from some money to no money.
And so at the end of that, we shut the gym down. I got tons of refunds and things like that that ended up happening afterwards because people are weird when you shut a business down, so heads up. And so we just kept, but the coach that I had at the time was just like, just write the checks, do right by everyone, and you'll be able to escape this thing
unscathed emotionally and and more or less I did I was able like that was some of the best advice I ever got like I just I didn't try and pursue anything with the partner I just wrote the checks for all the the customers who even if even if we had fulfilled the services which I just wrote the checks and I actually didn't Layla wrote the checks because I was I was so like destroyed by this entire decision you know process but anyways I was completely you know clean slate at that point I think all in all um
I had $23,000 left over at that point. And so after selling six businesses and all that stuff, I had nothing left. And this was hard for me because I just spent four years building six facilities and all that stuff, and I almost had nothing to show for it.
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Chapter 5: What challenges did Alex face after selling his gyms?
And that was one of the biggest lessons that I've had is that you have all these skills and experiences and character traits that you developed to show for it. The entrepreneurial journey is one that improves you, not anything else. And so that's why I'm such a big believer in that stuff, because like I had these things, these assets that I did not value.
And what's crazy is that in the next, you know, 30 days or so, we did a hundred something thousand in sales. And so I was like, oh, wow, we we can do this. And so. Anyhow, actually, I think what ended up happening is I had almost no money, and then we did a launch, and then after all the costs and everything, I think I had 20-something thousand in money for me.
The next month, Layla and I said we were just focusing purely on this business. She told all of her friends from high school to quit their jobs, right? So she had six friends from high school that all were doing MLM, Shake Mix stuff. And she said, hey, you know, you should quit that and start selling this stuff. We can make a hundred bucks a pop instead of, you know, making $5 on ShakeMix.
And they were all like, awesome, let's do it. In between month, between, I think it was like November-ish going into January, which is when we wanted to slate the six gyms that we were going to launch at the same time, which of course makes sense, right? Why go from one to two when you could go from one to six? Because it's a brilliant idea of Alex's, right?
And so we had one month in between where I was going to go launch a gym with Layla. We were going to do like a hundred grand-ish. And then I was going to be able to, that was kind of going to be the restart money, right? So here's what happens next. I get a text from a guy and he's like, hey, my brother lives in the same city as where you're starting your new gym.
And I was like, not starting, doing a launch. I was like, okay. And he's like, yeah, he's a salesman. He really needs a job. He's got a baby and he's got another one on the way and it might be a good fit. And so anyways, I knew I needed to take a month to kind of put all the resources together to start doing the launches at six at a time and training those sales guys and everything.
So I was like, okay, that might work because then I don't have to spend all day selling. And so anyways, I trained him and he crushed it. In the next 30 days, he did um, I think 120,000 in sales in December, which is like a, a hard month to do it in. And B, it was a great first, you know, launch for somebody who's new, which also kind of proved the model to me because I had done it.
Layla had done it, but we never had someone else who wasn't like super tied to me doing it. Obviously Layla was more invested than just, you know,
just an employee right at the time and so uh it was awesome so i was like super excited i was like sick this 100 grand is going to be the launch money for the next thing this will be great and so um at this point layla says this guy's a winner i'm gonna take him home to meet my family which is hilarious because i was not a winner at that time and so anyways i'm at her at her family's house
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Chapter 6: How did a cash flow crisis impact Alex's plans?
We haven't gotten a deposit since like, I didn't get a deposit last Tuesday. And I was like, okay, that's odd. And I called them and they're like, Hey, you know, I gave it like three or four days because I was like, you know, maybe it's delayed or something. And it had been a holiday because it was in the holiday season, whatever. And so the deposit is supposed to hit. It doesn't.
I wait some days, keep checking, doesn't hit. I call them. They say, hey, you're in an annual review. It's standard, nothing to worry about. And I was like, that's weird. I've been with you guys for five years. I've never had an annual review. Interesting. And then waited a couple of days, called again, was like, Hey man, like we're really going to need these funds.
Like I need you to deposit these. And they're like, yeah, we're just working through some final things, blah, blah, blah. I was like, all right. And so Christmas Eve, I call them and we're supposed to launch six gyms starting on the 26th. So two days later, I called the guys up and I was like, I'm not getting off the phone until you send me the money.
Like, I'm not like I need, there's a hundred grand that's sitting there. Like I need that money. The guy was like,
sorry you know we're seeing some irregular activity uh in your account and this is because we had written all these refund checks for for uh clients when i was closing down the the gym the the last gym that i had so there's been some irregular activity this isn't the way that um you know you're not you it seems like you have a virtual business now that's not what this is intended for this is supposed to be for a single brick and mortar location so we're going to hold on to all the funds for six months and i i lost i lost it
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Chapter 7: What lessons did Alex learn about entrepreneurship?
And for those who don't know me, when I lose it, I don't actually get like explosive. I just get incredibly cold and very mean. And so I probably said some of the meanest things. Like I didn't cuss. I was just like, I destroyed the person's character that I was talking to on the phone. Like that person questioned like why they were alive.
And so anyways, I got off the phone and Layla and I, his parents are supposed to go to the movies because it's Christmas Eve. And her dad was like, you know, he seems a little stressed. She's like, is she always this way? And, um, and of course I was a little bit stressed at that time. Um, and so here's what was crazy is that as we're going to the movie theaters, I'm just like completely numb.
I just was like, I feel dead on the inside. And so we go to the theaters, the movie's playing in front of me. I'm not even watching the movie. Layla,
holds my hand and she's like what's going on i was like i'll tell you later um she takes my pulse my resting pulse was like 120 in a dark movie theater at age 27 um i was stressed out of my mind and so we left the movies um and i told her i was like the money's not coming and she was like what do you mean i was like they're keeping it she's like can they do that i was like apparently like this was the first time i'd even known this that a processor can hold money
And so anyways, I got home, I still owed the salesman from the last month who'd done that huge launch, like this, this, all these sales that had happened to somebody had sold them. Right. But I didn't collect the money from it. And so I owed a $22,000 commission check and I had $23,000 left and it was on money that I never received.
And so, um, in, in congruence with the lesson that I had learned from, you know, the clean exit of all these other things, which was like, just do right by everyone. And then you won't have any emotional scars that you'll carry with you. And so I wrote the check, actually I wired it for 22,000 and I had $1,000 left. And that's when we got home and I told Layla everything that I had done.
I was like, I have $1,000 left. And we were supposed to launch, she had told her six friends to quit their jobs and we were gonna start launching gyms two days later on the 26th. And I was like, I have $1,000 and I have a credit card that has $100,000 limit. I was like, I will do this. I was like, but this could go horribly wrong. So you don't have to stay with me if you don't want to.
And that was like this was the moment for me that I that I knew I was going to marry Layla. And she said, I would sleep with you under a bridge if it came to that. She's like, we'll get through it. And that was what I just like.
I wanted to like, you know, I would I would have been teary, but I was so emotionally numb at this point that I just wanted to just like keep moving forward and keep keep keep getting through it. And so anyways, 48 hours later, I make all the ads. I set up all the campaigns, all the funnels, all the everythings.
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Chapter 8: How did Alex overcome financial struggles in his business?
And I'm going to be going in debt at a rate of $3,300 per day of money that I do not have. And so anyways, I turned it on and the six guys were at the locations. And it was $3,300 a day because I was paying for hotel, airfare, food, car, ad spend and commissions every single day for six guys. And I had, remember, I had $1,000, right? And so it was all coming out of a credit card.
and the next 30 days, and we ended up getting canceled by the processor, right? I told you this at the beginning of the story. So I started all this, and I had no way to process money. So these guys are getting leads, they're making calls, they're closing deals, And I can't process the money. All right. And so, so we're sitting there, right. And, and, and these contracts are just coming in.
Right. And we had them scan them. So we had this mobile app and we had this central Dropbox, which of course is not PCI compliant. I had no idea what PCI compliance was. Um, and so we had this, uh, one lady that we used to work at my job that I was paying part-time to processes.
Mind you, I didn't understand what like how much work this was because we were doing like 50 sales a day right between these locations at like 500 bucks a pop. And I was paying someone for part time four hours a day of contract work, which was just insane. It was like it was probably two people's worth of work. And I was paying somebody part time.
It ended up that ended up blowing up because she couldn't do that in her full time job. So and and we didn't even have a way to process the money anyways. Right.
and so anyways we're i'm calling everybody i know to try and figure out i was like hey can you process this and then you can keep 10 and just send me the rest of the money and people were like i don't know man like i don't know if i want to do that and so no one would process the money for me and so um i called you know every person i knew and then i finally got uh in touch with a guy named alex roy at the time uh who specialized in like high risk processing which is basically the category i was in at that time
And he said, I can get you set up. And I was like, okay, cool. Um, he said, but given the record that you have right now, uh, because you just refunded all those, all those people at the last location, he's like, they're going to want a reserve, which means they keep a certain percentage no matter what. Um, and they're going to put a limit on how much you can, you can, you can charge.
And I was like, okay, cool. He said, they'll give you a $50,000 limit. And I was like, dude, I need like four times that. And he was like, sorry, man, that's what I can get you. And so the last week of January. All right. So we were doing, you know, we're doing five, six, you know, thousand a day in sales, maybe more than that. and I had no way of processing it, right?
And the last week I get this processor for $50,000 and I run $50,000 in a day, right? And he's like, okay, here's the good news is that it's per month. So it was the end of, he's like, so this week you can do 50 and the next week you can do 50. And then I'll see if I can get more lined up, more processors at 50K to allow you to start processing for them. And I was like, okay, fine.
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