Why Your Education Business Isn’t Sellable | Ep 877

May 1, 2025 by Alex Hormozi

"If you're trying to solve for continuity or solve for sellability, let's go into those."

"If you don't have something that is consumption-based, think about what components of whatever it is that you sell someone must consume on a monthly basis that they use and reuse so that you can get them to buy again and again."

In this episode, the host addresses common challenges faced by those running education businesses, such as customer churn and the difficulty of selling the business. He emphasizes that education businesses often struggle because they fail to establish high standards and make unrealistic promises. By comparing education businesses to Harvard, he illustrates the importance of creating a brand that attracts customers and maintains demand over time.

The discussion pivots towards the differentiation of educational content versus consumables. The host explains that many entrepreneurs mistakenly believe that payment plans equate to continuity. He provides examples of successful consumable models, such as providing ongoing access to valuable resources and community support. This model helps reduce churn by ensuring continuous value for customers.

He emphasizes the importance of effectively pricing both one-time educational products and continuous offerings. To build a sellable business, it's vital to derive value from both consumables and education, ensuring customers find ongoing worth beyond their initial purchase. The host also discusses different strategies to create stickiness in businesses, like offering continued education and ongoing certifications, which can foster a lasting customer relationship.

Towards the end of the episode, the host warns against mixing education with software ventures, as this often leads to distractions and compromises in business efficacy. He advises listeners to focus on core value creation, stressing that solid customer retention is key to building an enterprise value. Those looking for enterprise exits should aim for a model that ensures future cash flow based on robust customer retention strategies.

Key Takeaways

Education businesses need to establish high standards and realistic promises to reduce customer churn.
Differentiation between one-time educational content and ongoing consumable services is crucial for maintaining customer relationships.
Pricing strategies should reflect the value of both educational offerings and consumables to enhance customer retention.
Mixing education with software ventures can dilute value; focusing on core offerings is essential.