The Game with Alex Hormozi 7 Ways To Measure Business Value | Ep 314
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Jul 1, 2021 Dive into the intriguing world of measuring business value! Discover criteria for evaluating an entrepreneur's worth, from contract values to owner earnings. Learn about assessing revenue over a business's lifetime and the significance of cash flow. Alex ranks these popular methods, revealing the best and worst practices. It's an insightful exploration that empowers you to understand the true metrics behind business credibility. Tune in for actionable lessons on navigating the entrepreneurial landscape!
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Focus on Cash Collected, Not Contract Value
- Look beyond stated contract values and focus on actual cash collected.
- Consider contract reliability and business economics like churn rates.
Lifetime Revenue is Misleading
- Don't be impressed by lifetime revenue claims; they can be misleading.
- Ask about yearly revenue and profit for a clearer picture.
Understanding Business Valuation
- Business valuation depends on who assesses it and their criteria.
- Multiples of EBITDA are common, and high multiples can be deceptive.