The Game w/ Alex Hormozi cover image

The Game w/ Alex Hormozi

7 Ways To Measure Business Value | Ep 702

Apr 24, 2024
19:14
Snipd AI
Learn about key aspects of business valuation in this podcast, including contract value, lifetime revenue, yearly revenue, profit, net free cash flow, and personal net worth. Find out which metrics are best to use and why you should not rely on others to determine the value of a business.
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Podcast summary created with Snipd AI

Quick takeaways

  • Scrutinize actual payments collected for accurate business valuation.
  • Distinguish between lifetime revenue and annual performance for an unbiased evaluation.

Deep dives

Extrapolating Contract Value

One way people falsely inflate business value is by extrapolating a single month's contract value indefinitely, creating an illusion of high earnings. For example, selling yearly contracts at an event and claiming inflated monthly revenue based on unenforceable contracts. The key is to scrutinize the actual payments collected and the reliability of the contracts being sold.

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