If you are a business owner that has a big old business and wants to get to a much bigger business, go into $50, $100 million plus we would love to talk to you. So let me actually spell it out because I think it might be useful. This is how business really works. My friends, most of the nation, most people don't want to do this math, but this is why most people don’t make money. All right. The point right here is the point of equilibrium. It means that the number of new sales they make compared to the number of people that exit the business are the same. If nothing changed about the business, their churn stays
It’s all about understanding the formulas. Today, Alex (@AlexHormozi) talks about the importance of understanding the two fundamental equations of business to make informed decisions. He also emphasizes the need to know the number of new sales per month and lifetime gross profit per customer.
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 on his path from $100M to $1B in net worth.
Timestamps:
(1:05) - Fundamental equation: number of new sales or sales velocity
(2:38) - How to calculate lifetime gross profit per customer
(7:13) - Equilibrium point is where we level out
(9:08) - Cost to acquire a customer
(10:10) - 3:1 LTV to cap ratio or greater is necessary for growth
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(This episode is a re-run. Original airdate was November 16, 2021)