The Game with Alex Hormozi

You will stay poor if you don't understand this equation | Ep 346

5 snips
Nov 16, 2021
Unlock the secrets to business success with essential equations! Discover why understanding basic math is crucial for making smart decisions. Learn how to calculate lifetime gross profit per customer to boost your bottom line. Delve into a case study of a marketing agency's model for practical insights. Alex emphasizes the power of high-quality data for growth and cash flow strategies. Get ready to transform your approach and drive profitability with newfound knowledge!
Ask episode
AI Snips
Chapters
Transcript
Episode notes
INSIGHT

Data-Driven Decisions

  • Entrepreneurs need high-quality data to make sound business decisions.
  • Poor data leads to poor decisions and undesirable outcomes.
ADVICE

Fundamental Equation of Business

  • Understand the fundamental equation of business: Number of New Sales * Lifetime Gross Profit per Customer = Hypothetical Max Revenue.
  • Use this equation to assess business growth or decline.
ADVICE

Calculate Lifetime Gross Profit

  • Calculate Lifetime Gross Profit per Customer using these equations: (Price * Margin) / Churn (for recurring businesses) or (Price * Margin) * Number of Purchases.
  • Knowing this helps determine customer acquisition costs and profitability.
Get the Snipd Podcast app to discover more snips from this episode
Get the app