Why I sold a profitable business

Hey friends,

I’ve sold two profitable businesses in the last couple of years. 

They were both solid, cash-flowing operations. And I didn’t sell for the reason you’re thinking. 

But they had turned into “gray area” businesses — good fundamentals, but just not right for me.

As an owner, here’s an important question you should ask: Is your business right for you?

Here’s how I think about it.

We sold our drive-thru coffee business about a year ago.

I started it with two other partners, and it was a good operation, doing a few million in revenue. Mildly profitable because, you know, restaurants are hard. 

We started it after I took a vacation and saw a 7Brew with lineups around the block. It’s a drive-thru-oriented coffeehouse, built for speed and maximizing car traffic with multiple lanes. Less “coffeehouse”, more “caffeine-sugar dispensary.”

At the time, San Antonio didn’t have these. My partners and I were the first movers here, and we opened four locations in our first couple of years. 

Things were going fine. 

But a few years in, I realized… I’m no longer the right owner for this business.

Now, I was the right person to start this business. I was excited about the idea, I was willing to put in the investment, and I’m pretty good at getting stuff from 0 to 1.

But eventually, I realized I should probably get out of it. 

Three main reasons:

In short, this had become a “gray area” type of business in my portfolio. It was a good business… just not for me. 

That’s a pretty good sign to sell. 

So we did, and found some great buyers who were passionate about coffee. And they’re doing great with it. 

The second business I sold recently is called Scalepath. It’s an online community for CEOs. 

We launched it about two years ago, when I was speaking with many aspiring and early-stage entrepreneurs. 

I loved the people I met, our members get a lot of value out of it, and it’s a profitable business. 

But in the end, I realized I don’t want to spend my days operating an online community. It’s pretty darn hard, to be frank. Members churn, you’re constantly recruiting, and it feels kind of like hosting a 24/7 cocktail party, trying to keep everybody delighted. 

You want to know what I don’t like that much? You guessed it – cocktail parties.

So we found Rand Larsen. This guy is deeply passionate about community building for small business owners. And I mean passionate — he practically lives out of his van, driving all over the country, meeting and connecting these people.

I’m still part owner of the business, but Rand took over as CEO and is running the show. 

The business is better for it.

(By the way: even if I don’t want to run a community, I still think they’re insanely valuable to be a member of. Joining one in my 30s was probably the single best career move I ever made. You learn 10x faster, you find people who actually understand your struggles, you push yourself to do more… it’s worth it.) 

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So what’s the takeaway? 

If you’re a business owner (single or multiple), there are a few different circumstances you can find yourself in.

One, the business isn’t making money. If that’s the case, you’ll probably have to shut it down.

Two, the other end of the spectrum: you’re wildly successful and making a killing. 

But there’s a big middle ground. It’s a good business, it’s making money, but it’s not what it could be, and maybe you’re getting half-hearted about it.

We’re always hearing the advice that you’d be crazy to sell these businesses.

But if you’ve got a “gray area” business, be honest about it. 

Something needs to change. 

Maybe it’s a pivot to something that energizes you. 

But there’s also no guilt in saying, “this business needs a better home than I can give it.”

Looking back on my career, I wish I’d realized 10 or 20 years ago that moving on isn’t a bad thing. These days, when a venture enters the gray area, I’m excited to find the best possible hands to put it in… and find the next thing.

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*By that I mean: I went to the Lego store while I was in New York anyway.

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Thanks for reading. If this letter spoke to you, hit reply and let me know!

Michael

P.S. Job alert: our business Alamo Fireworks is hiring a Development Manager in San Antonio. Apply here!

MORE WAYS I CAN HELP YOUR BUSINESS

💡 START → ​The Low-Risk Business (ebook)
Get the 5-step framework I've used to build multiple businesses from scratch. 40 pages of hands-on, practical guidance.

📈 SCALE → join ​Scalepath ​
Connect, learn, and grow your business with expert guidance, vetted community, detailed playbooks, and other resources. For businesses making $500K+ in revenue.

🌎 HIRE → talk to ​Near ​
Meet your hiring needs with top-tier Latin American talent for 70% less than US staff. My team at Near takes care of all the headaches. Get in touch today.