Business Owners: You NEED to Know This
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- čas přidán 29. 06. 2024
- Want to SCALE your business? Go here: acquisition.com
Want to START a business? Go here: skool.com/games
If you’re new to my channel, my name is Alex Hormozi. I’m the founder and managing partner of Acquisition.com. It’s a family office, which is just a formal way of saying we invest our own money into companies. Our 10 portfolio companies bring in over $200,000,000+ per year. Our ownership stake varies between 20% and 100% of them. Given this is a YT channel, and anyone can claim anything, I’ll give you some stuff you can google to verify below.
How I got here…
21: Graduated Vanderbilt in 3 years Magna Cum Laude, and took a fancy consulting job.
23 yrs old: Left my fancy consulting job to start a business (a gym).
24 yrs old: Opened 5 gym locations.
26 yrs old: Closed down 6th gym. Lost everything.
26 yrs old: Got back to launching gyms (launched 33). Then, lost everything for a 2nd time.
26 yrs old: In desperation, started licensing model as a hail mary. It worked.
27 yrs old: "Gym Launch" does $3M profit the next 6 months. Then $17M profit next 12 months.
28 yrs old: Started Prestige Labs. $20M the first year.
29 yrs old: Launched ALAN, a software company for agencies to work leads for customers. Scaled to $1.7mmo within 6 months.
31 yrs old: Sold 75% of UseAlan to a strategic buyer in an all stock deal.
31 yrs old: Sold 66% of Gym Launch & Prestige Labs at $46.2M valuation in all-cash deal to American Pacific Group. (you can google it)
31 yrs old: Started our family office Acquisition.com. We invest and scale companies using the $42M in distributions we had taken + the cash from the $46.2M exit.
32 yrs old: Started making free content showing how we grow companies to make real business education accessible to everyone (and) to attract business owners to invest or scale their businesses.
34 yrs old: I became co-owner of Skool.com to help the many people who want to start a business online do so.
Today: Our portfolio now does $200M/yr between 10 companies. The largest doing $100M/yr the smallest doing $5M per year. Our ownership varies between 20% and 100% ownership of the companies. Many of them we invested in early and helped grow (which is how we make our money - not youtube videos).
To all the gladiators in the arena, we’re all in the middle of writing our own stories. The worse the monsters, the more epic the story.
You either get an epic outcome or an epic story. Both mean you win.
Keep crushing. May your desires be greater than your obstacles.
Never quit,
Alex
FULL DISCLOSURE
I make content to make money - just - on a longer time horizon than most. I want to build trust with business owners so we can find the best ones and help them scale. And if they’re awesome, write them a check and go all the way as partners.
I can’t lie, this new style of video just ruined his past videos for me.
These are soo much better to my ears without the unnecessary music and sound effects.
Agreed.
Not everyone responds to content the same way. Alex and his team know both styles are needed
This sit-down format is my favourite by far.
100000% agree. More of this please Alex!
It's almost my favourite. Only second to standing with a whiteboard!
Agreed 🔥
this
No fancy edits, no sound effects, no crazy jump cuts. Just straight up GAME. Alex always delivers
It baffles me that I didn't learn about this in college while studying corporate finance 💀
Bro I studied in finance too. The goal of these programs is to make you a corporate drone for a bank or insurance company 💀 i quit mid program when I realized they don't teach you how to make money.
And they charged you for it! I hate that so many programs scam so many people not teaching them the real world important stuff.
You learn this in Marketing, not CF.
@@PBurgaard that makes sense, but I feel like it would be a worthy addition to the program, as it seems to drive a lot if not most of the financial results of the business
0:00 - Introduction and Overview
0:21 - Achieving a $100 Million Net Worth at Age 31
0:30 - Importance of Maximizing a Key Number
0:49 - The Key Ratio: LTV to CAC
1:00 - Defining LTV: Lifetime Gross Profit
1:34 - Understanding CAC: Customer Acquisition Cost
1:56 - The Impact of LTV to CAC Ratio on Business Growth
2:32 - Case Study: Mismanagement of LTV and CAC
3:48 - Correct Calculation of Lifetime Gross Profit
4:40 - The Role of Gross Profit in Business Reinvestment
5:10 - Clear Understanding of LTV and CAC for Business Owners
6:02 - Example of Efficient LTV to CAC Ratio: Starbucks
6:42 - Marketing Efficiency and Customer Acquisition Cost
8:00 - Strategies to Improve LTV to CAC Ratio
8:46 - Ethical Competitive Advantage through Higher LTV to CAC
9:20 - Real-Life Example: Business Coach’s Misunderstanding of LTV to CAC
10:08 - Importance of Knowing Data for Business Scaling
10:31 - Breaking Down LTV and CAC Metrics
12:00 - Example: Service-Based vs. Product-Based Business
13:00 - Optimizing Business Structure Based on LTV to CAC
14:50 - The Power of Cross-Selling and Upselling
16:00 - Case Study: Glass Repair Business Optimization
17:25 - Example: Pool Design Business Optimization
18:26 - Productizing Services for Higher Efficiency
19:00 - Following Business Passion vs. Business Efficiency
20:00 - Example: Gym Launch and High LTV to CAC Ratio
20:46 - Strategies to Improve LTV and CAC
21:51 - Practical Steps to Increase LTV
22:54 - Improving CAC: Funnel Efficiency
24:54 - Front-to-Back Strategy for CAC Optimization
25:54 - Summary of Business Insights and Strategies
26:29 - The Importance of Understanding and Applying Business Ratios
27:00 - Advanced Business Metrics and Strategies
Thank you!!
your the goat
Some heroes don't wear capes.
Bro thank you so much 💪🏾💪🏾💪🏾💪🏾
So much needed
Amazing video, you work for 40yrs to have 1£M in your retirement, meanwhile some people are putting just £10K into trading from just few weeks ago and now they are multimillionaires
I've been making a lot of losses trying to make a profitable trade. I thought trading on a demo account is just like trading the real market. Can anyone help me out or at least advice me on what to do?.
I'm favoured financially, Thank you Mr Lee Davis!! $32,000 weekly profit regardless of how bad it gets on the economy.
Thank you Lord Mr Lee Davis for the gift of life and blessings to me and my family $14, 120.47 weekly profit Our God have lifted up my Life!!! A. V
I have made more than 90 K God bless Mr Lee Davis God bless America 🇺🇸
Hello, how do you make such amount? I'm a born christian but sometimes I feel so down 🤦 of myself because of low finance but I still believe in God.
Sorry I cant attend this meeting, Hormozi posted
real
Cringe 😬
Alex would do meeting while listening to the video bro
@@bobsimpson9228I’d hate to be partnered with you. It was a joke, develop a sense of humour.
PLEASE MORE OF THIS TYPE OF CONTENT!!!
27:01 A business lesson that rolls a math class into a language class.🔥 100% invaluable and simplified. Thanks Alex, love this format.
TL;DR wining and dining will always work.
We are service based. It’s been calculated the average CAC is 4,200 USD.
.
We immediately realized we were penny pinching ourselves out of millions.
Introduced gifts, golf meetings, or anything we know the prospect/client enjoys into the sales process
Since, our leads have increased and close rate is climbing.
Have started doing this in my business too. Gifts for no reason! Works great especially for service businesses.
Gg dude
Thanks for Sharing!
27:30 I spent a few hours today charting and reviewing discounted cash flow projections until 2043 for an oil and natural gas company out of Alaska.
When Alex said “can this apply to investing” I had the same face because I found myself finding ROI multiples for different projections 😅 lots of variables like barrel pricing, recovery rate, and regulatory factors but a base case 40x and a High side 270x are exciting projections.
Thank you Alex for always bringing VALUE for FREE to everyone who is willing to listen 💪🏼
how tf is this information free
Because knowledge isn’t a fraction as valuable as applied knowledge
Because he is then going to make money off of you. You are the product.
@@user-uq4gj1fo2u well i rather be the product with Hormozi and $5M on my pocket than not be with $0... you choose.
@@user-uq4gj1fo2u Which isn't even inherently a bad thing, as long as the products are valuable. Things like this CAN be a net-positive for everyone involved. That's how most business is done anyways.
How tf did we start believing that we needed to spend thousands for such trash info. He’s going over billions. Not course sales. Different game.
This sit down and talk type format is just like the books. Every sentence feels packed full of content. I’m here for the long run :)
This is a serious business class, top level. Gold.
The value in this video is immense (coming from someone who sees almost all of your videos)
This is the kind of stuff they pay thousands of dollars in masterclasses or mentorships!
Thank you Alex
Thanks for your constant generosity. I don't think you realize that most people are not as sharp with thinking in math terms and creating clear frameworks. One of the major things i appreciate about you is you're able to look through complex processes and distil them into extremely clear and teachable frameworks.
Thanks man - looking forward to the next book.
Our company is not large enough yet to get the attention of Alex and Leila, but we are actively implementing everything Alex is sharing with the intent of earning his attention in the near future. Thank you for all the knowledge! You and Leila are total bad asses 😎
The value of this content is crazy
Alex, this was not too dense! It’s just like your work how Much effort are you willing to put in? not time……. Seriously, loved this video and loved the new direction of the channel. Keep it up, man you’re great.
An amazing summary as always! Thank you infinite times for sharing your overviews and views! Sending you a lot love, respect and thankfullness! 🧡
Was waiting for someone to break this down this simply for so long ! Thank you so much Alex I got some homework to do now
These not Brainrot videos are SO helpful. Keep it up brotha, just closed my first client today (organic, got two before with networking) super excited thanks brotha
Definitely watching this video 10 times a day, major value
The Fundamentals are so important
These lecture/conversation style videos are amazing. Thank you for them!
HELL YES!!!! HORMOZI UPLOADS I DROP EVERYTHING
Everything makes so much sense now.
Please make more detailed vids like this.
On my 6th watch.
Gem of a video. I just understood how to bring my business to 7:1 before the end of the summer. This is a gem of a video! We Need more like it 🙏🙏.
PS: what about sorting the videos by topic, it would be amazing
Probably one of your best videos. I couldn't agree more with what you are sharing.
Great stuff 👍. Thank you Alex & team for sharing that much value for free, on a recurrent basis.
Hi Alex, I love money/business math! Please don't apologize and do more of it! Keep it up! You the GOAT
Fantastic information as always. I had to justify why I was starting with a weaker service, and the reason was that I needed to stress test the front desk/sales people at the practice. I did not want to push heavily on the most popular service and see them crash and burn.but when they asked about the next one, I was really just shooting in the dark. This video has shown me very clearly that the second or third thing that we push needs to be the service with the m highest LTV: CAC ratio
Love this a lot more with the good old in your face angle. Amazing value as always as well! (I just finished 4 hours of listening to your old podcasts it's Mozi Sunday so to speak haha)
This is unbelievably valuable. Thank you, Alex. Appreciate you big G.
Wow the hair extensions and coaching example is exactly my business. Felt like a custom solution. Extremely insightful, as always!
Me too. But Into Hair Extensions
Thank you for all the info Alex!
This was the most info-dense video so far. Thanks man
Good stuff Alex. Thanks. Reach out next time you're in FL.
Did you really just tell Alex to do something for you when he's in YOUR area? Bruh..
great advice, great explanation, great strategy (and great format, love no background music)
Pure GOLD. Thank you 🙏
Pure gold - as usual. Thanks, Alex.
TOP TIER business video. I've watched twice today time to implement today thanks Alex
this content is fire. what a good pivot.
This is a great video, in that it shows that money is not in the sale, but in the lifetime profit of a customer.
Promote that where you can get them as easy as possible and take them in to a situation where you can keep them as long as possible
I don't run a business, but people out there thinking LTV can be a valid metric without first removing costs, is pretty wild.
Love it! Studying the transcript line by line
Keep up this style so good
As a software developer aspiring to be fluent in product and bussiness, this video sounds like engineering to me which made it super clear where to fit the pieces.
I watched the first vid where you spoke about this ratio a week ago. So this reminder was nice
Excellent video. Thanks Alex.
More of these content please!! Love getting into the hard numbers! 😆
A combination of education+effective entertainment is neccessary. Reverting to linear only gets so far.
Anyone else hear this audio hiss?
Love Alex and his content!
You are a major inspiration to me. Major game changer. Thank you so much! ❤
This one is pure gold Alex, great insights
More of this type of content please!
GOAT 🔥, Love You my Man!
I LOVE the math oriented side(s) of these videos.
2:00 disproportionate returns for successful business over other investments
7:45 massive businesses are created from huge discrepancy between ltv and cac
14:30 how to stack multiple products to maximize ltv to cac, and scale your business
16:50 why productive services with a narrower offering can scale so much better
19:20 wealth creation of concentrated in periods where your ltv cac ratio is extremely high, rev that engine even if the money your making is so absurd it feels illegal
20:00 for to increase ltv basics
24:30 CAC can disproportionately increased at the front end
26:20 LTV is what differentiates big businesses and small businesses. Since CAC ends up converging for the same customer avatar
28:00 if what you’re doing is not getting you more customers cheaper, or making those customers worth more to you - you’re probably wasting your time
I love this type of in depth information. It seems to me like your hesitant for whatever reasons to make more content like this. You dont want to bore and confuse people, you dont want to go to in depth on your secrets, it would be alot more effort on your end to produce the content? Whatever your reasons are im sure they are valid.
Mom, wake up!! Alex posted a new video
Great video, thank you!
This is prob the #1 video I needed to hear this year.
I've done offers that were 80:1 and now realizing the thing I'm doing now is 2:1 (lots of people)
I'm curious to know wich busisness model did 80:1?
No clue how lost I would be in the world of business without Alex's videos
Eddie Maalouf and Ashton Shanks drilled this at there mastermind recently.
This is GOLD!!!!!!!! SERIOUSLY!!
fire video keep em coming!
You have really good content and keep it up!😁😁😁
Content just got better
I think you should be more popular
I'll watch again when I'm not driving. This is a game changing lesson!
These business videos are the best content
Broski, this was so value packed. Blows my mind we can get this shit for free. You're saving me so much time, $ & frustration by teaching lessons you had to go through years & pain to learn. I get to avoid all that & just implement lol. Hope you understand just how impactful you are to the younger gen of Entrepreneurs. Preciate you
We need more of this!!!!
If there was a Hormozi comedy clip collection this would have to go into it: 4:08 - 4:19
Thank you
Ok, I need to know this. I'm looking for it
1. Is LTV always a “historical metric”? I.e. how do you factor in uncertain future profits from non-churned or new customers? And if its always historical, does that mean its only calculated with churned customers?
2. How can i calculate either of these metrics with my tiny food service venue? I can’t necessarily afford a fancy tech stack, so i dont really know whose coming back and how i acquire my customers… (empirically, i mean. I do serve and talk to my regulars, but i dont have a non arbitrary way to track)
He should reply to this
for 2. sounds like you need to start tracking data. For example, you can have an excel sheet where you store your customers history. If a customer comes back , you now update your sheet with that information so that you have actual numbers. You can say you serve your regulars but now you will know for example, that you served a particular regular 12 times in May. Overtime, you will now have data to calculate things like retention
@@user-hh6kf5gw8w that doesn’t really sound feasible. However, I have found that my POS does have a rudimentary way to track new vs return customers though
Insane value! Thanks Alex!
Great talk thank you
Great Breakdown!!!
Love this video ❤❤❤❤ this is the language of business
I'm currently in the process of shooting video for me product and I did the math to find the ratio. It came out to 323:1, so I ran the numbers again just to check, obviously having to assume 10 sales over 1,000 calls, but that was the math that I came up with. Once it launches and I have a few dozen sales under the team's belt, I hope to see you in person one day.
Thank you 🙏🏿
Awesome value man
LTV of Starbucks customer 14K plus on average. Insanity! Solid reminder to sell things that a lot of people buy a lot of and consistently. Great stuff!
Excellent lesson
start with the service that has the lowest LTV:Cac ratio then behind it upsell the rest..
Worth watching 10 to 15 times.
thanks!!!
This was very helpful
Sit down video are best
Thank you!!!
Straight up facts 👍✅💯💯
Vi
Legend in the making❤
He's ALREADY a legend bro lol
From $37K to $45K that's the minimum range of profit return every week I thinks it's not a bad one for me, now I have enough to pay bills and take care of my family.
Some times last week I tried trading all alone but ended up loosing $3K 😢
Where can I achieve such a gain
All thanks to Alex Robert
He is a licensed broker and a FINRA AGENT here in the States.
Yes!!! That's exactly his name (Alex Robert) so many people have recommended highly about him and am I just starting with him from Brisbane Australia 🇦🇺
This is soo goood. I am privillegded to watch this. I kinda feel I should pay for it.
I love this!!
thank you
A condensed video on all business math would be awesome
This is super damn good !
I know realized everything revolves around LTV:CAC even brand, product, and offer.
Best content so far.