Million Dollar Equations
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- Опубликовано: 10 сен 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.
00:00 - LTGP:CAC
00:53 - LTGP (Life Time Gross Profit)
06:42 - CAC (Customer Acquisition Cost)
09:00 - ROIC (Return On Invested Captial)
13:10 - Payback
16:05 - Sales Velocity x LTGP
18:45 - Sales Velocity / Churn
👽
your a hero
S@@ididathink5295
thanks
My man!
This type of content is unique on RUclips. Incredibly valuable, it doesn’t get more practical than this. Thanks Alex!
Agreed I’m trying to get my videos this visually pleasing lol soon soon
@@DadThinkBiggeryour videos are good, just work on your audio.
@@WesternSorrows thank you for the tip !
That is correct.
Lmao ok you plant
I don’t know why anyone would spend 4 years studying at university learning from people who don’t have experience in this, when they could watch every video Alex and Leila have put out. The teaching is so simple to understand and thorough! You guys are so appreciated!!
Is the goal to become a business owner/entrepreneur or work for one?
You don't need a degree to start a business, but the education is super helpful.
@TheSkyFallTronic most people will not put the work that's required in to be successful in business
@@TheSkyFallTronic well of course no one automatically becomes rich. But if you'd study their content (vids, books etc) for a while and applied them you'd be way better off. I have been consuming stuff like this for a while and Alex his stuff is simply way better, even if I was already familiar with some of the concepts.
The alternative is is going to school for 4 years while not growing anything and going massively into debt you can't get out from under. Good luck paying back that 60k+ loan
@@cupofmozzarella before i watched alex entrepenuership seemed like rocket science but now it seems easy or at least so much easier than before. Because before this i didnt put much value on it and now i put so much value on it
This is a masterclass in business in a free RUclips video that universities charged $100k to learn from a professor who has never started a business.
Yes👍
this has to be one of the greatest videos i’ve ever seen on in depth finance of running a business. just received both of your books and they’re next on my list. great stuff alex
Yes, 👍
I probably learn more from Alex in one video than I would a four year business degree.
The hard part is retaining that information
@@m3g4ninjatrue. But that’s great me and obs also for Alex cause I keep watching them over and over
@@m3g4ninja just watch it again and again till you can use it anywhere like formula in maths. The only different that these are interesting and clear useage
Not really, this is mostly just financial accounting ratios which you'd learn in literally BUS100
@vilej
Not "Business 101": Managerial Accounting.
Hey! Business 101… but understandable and from someone who actually has done it, yay!
Love the fact that he has taken comedy and performance more seriously to get us to stick around.
I have the utmost appreciation for you and Leila’s dedication and commitment to good systems and processes 🙏Happy Holidays 🎉🙏
Yes👍
Loved how product based businesses got some love in this video
This is by far the most technical and most informative value you've given to date in all of your videos man. Good for you. Keep this sort of thing going for the average person and you're going to change a ton of lives.
Yes👍
This type of content is 10x better than the MBA I have 🔥🔥🔥
It's easier said than done. The risks are high, and success stories like that are rare. It's not a practical path for most people.
Absolutely. I've been exploring too. It seems like every strategy has its moment of glory, but finding one that consistently works is like chasing a unicorn.
Consider financial planning
Generating substantial gains at uncertain times involves experience and intricate strategies best executed by financial planners
I can understand the wisdom behind working with a professional advisor because I’m completely aware of the psychological effects of wrong investments.
How does one find a good finance advisor?? How do I know they are trustworthy and competent?
please do a video about risk.
I am currently working on analyzing the market, the customer and the competition.
Next step for me is to identify the problems, goals etc.. so i can create my offer. But in the past few weeks/months i was always confronted with the term risk management. Of course i can just learn it by myself, but your explanation videos are always great. They help me out a lot during my learning phase.
There are two risk management concepts he already discussed in the video
Wow. I have very little knowledge of business jargon. This video is EXTREMELY educational for a newbie. Appreciate you, bro.
Yes👍
Waiting for a Buisness fundamentals book based on videos like this from Alex. Would read that front to back everyday
Yes👍
Very likely to be in $100M Money Models
Alex, you changed my life when I heard from you this quote "If you die with even a single idea unspoken, that means your life wasn't worth living"
He didn’t say that exactly. But you heard what you needed to hear to motivate you
Imagine having a private 6 months coaching with this man
Damn!!!
Alex, THIS is the kind of content that slays. No fluff, down to business, knowledge on blast like an open fire hydrant in NY in July.
Seriously, a discipline man could consume ten hours of this content in this format and go build an empire.
Thank you, brother. These kinds of videos you do are truly life changing. I wish I knew this decades ago.
Epic Business Master Class!
Alex, I don't like the background noise
Bro u getting this for free...
@@flameynoob trying to give honest feedback so he can improve
Okay then you can focus on his words with caption
Agreed
@@antfungames don't mind these people lmao
don't let them dictate what you should focus on LOL
Bruhhh AMAZING CONTENT, Right to the point, great examples and no BS
Great content Alex, amazing editing Mozi Team ⚡️
OMG, loved so much this video! After an MBA in international business and nearly 3 years with my project (currently at the phase of product building) I had no idea on how to set a price for a product. Now, after understanding and putting on an Excel LTGP : CAC ratio, I can finally look at the price I would need to set my product in order to get x in profit in a given period. And since my product will probably be 1 unit with no recurrence (due to its service educational nature) I really needed to understand these variables in order to set a good price. Thank you so much!!!
Interesting point ! Good luck
I’ve done so much mental M to Alex that I am noticing new content is updated old content better visuals stories more dialed in. Does this mean I graduated?
This is Gold! No hype, just pure facts from someone that's actually done it.
That good @11:33 was very GOOD!
Love this video on business ratios man! Would love to learn and apply more of this from you!
This feels like free school. Thanks for taking the time to do this when you could be doing absolutely anything else with your time. 🙏
Yes👍
Amazing video. Exactly what I needed to learn today. When you look at a business like this it is definetly a game I like to play. It's almost as curtain as 2+2=4
This is the best 20 minutes I have ever spent learning the true concepts of business!
Yes👍
No BS, no useless marketing … straight to the point , incredible valuable
Where would you track things like LTGP: CAC / Sales velocity, etc?
I understand all the concepts but I’m not sure the best approach to track and monitor.
Not sure what others are doing, but after watching this video, I use a Google Sheet to track everything on a monthly basis and then connect that to a LookerStudio report I made to visualize each metric by month, quarter, or year.
These are the 8 metrics I enter into the sheet each month and the rest are formulas that calculate everything else: Total Monthly Revenue, Active Client Count (beginning of month), Total Cancelled Clients, New Clients, Fulfillment Employee Headcount, COGS, Sales Rep Headcount, and Total Acquisition Cost.
I'm sure there are other great ways to track, but this is what has been working for me and it's free if you already use Google tools. Hope that's helpful!
Has anyone followed all of Alex's videos and seen their business thrive even more? Genuine question
I appreciate the knowledge Alex Hormozi
I can't believe this was free. Thank you
This inspires me to do the work and don't quit
This is a masterclass!!!
I wish I had discovered Alex in 2019 when I left my job to start my first business.
Yes👍
How can I start a community when I’m not an expert? Full disclosure I love Alex❤
I’m being honest, I still struggle to fully understand my numbers. I run a multi Six Figure membership that is build purely on content marketing (I don’t run ads). How would I tweak this equation find my ratios?
I love your energy! No wonder why you stay at the top for so long time. You inspire me a lot for my own channel. Thank you Alex!!
Yes👍
Absolute sigma. Thanks, king 👑
Hey Alex,
Huge fan! If you were a real estate agent what would your offer look like that they couldn’t say no?
Thank you!
Top notch content both in actual value delivered and in editing. Thank y'all!
Very valuable, except for the fact that I don't have a business
God bless you man❤❤
A 5x business is very hard to find and a 5x business at scale is even harder to find!
Amazing. Thank you Alex!
Alex, I don't know if you reply to comments here but here is what I was wondering. May seem like a dumb question, but is it possible to get paying customers to my business through my you tube channel? I'm not interested in vanity or large number of subscribers, etc but not opposed to it either. Thanks for all the teachings & happy new year.
This is why it’s so crucial to have a small CAC
As a business owner this info is invaluable!
Agreed !!
I don't understand the point (6) and (7) very well. Are there any videos that go deeper in these two points?
Thanks for all the value, I appreciate it!
another Masterpiece from Alex as always & simplified as it can be. You're an absolute LEGEND
Yes👍
People pay for this kind of content. This is incredible.
Thank you so much for your teachings Alex, I'm buying your books just to say thank you for teaching us.
I was watching Hormozi videos on RUclips a few years back and I had more subs than him. Obviously he’s doing it better 😂😂😂
Bro, Alex is my spirit animal.
I've noticed its very helpful to watch Sabri Suby's "Your Ads Suck" playlist alongside Alex's "The Game" playlist
Great video! How would you factor in a yearly increase (or decrease) in new customers? Let's say you sell to 10% more people every year, how would that affect your hypothetical max?
Amazing, thanks
invaluable video thanks man
Gyattt Damn! i'm blown away by how well the first concept works. Not even done with the vid yet, lol. Alex the goat!
awesome Alex!
Thank you so much for the valuable information.
Thank You So much man !
I’ve been hoping to find a video that walks through business concepts and definitions while being entertaining for a while. Much appreciated.
Thank you
Awsm video alex
Highly engaging with the sounds in the background. It's keeping me on my seat, I feel like I'm waiting for something to happen, very exciting
As always, brilliant advice . Thank you for taking the time to teach.
Alex, I truly appreciate all the content you post!
I have been following you for 7 years back when I saw your gym launch ads 😃
This one video just cleared and showed me how to solve so much fog I’ve had around our businesses growth for the last few years
2024 is going to be major 🚀
Thanks much ✊💪
Yes👍
08:15 - crap, you just blew up what i thought about my business on real CAC calculation. I wasn't calculating the labor involved with our ecom op.
Nice video & tutorial 👍
Thank you Alex ❤
can you create a masterclass of how a PE firm reviews a company that has 10 locations that hits $3m-$5m in net income per year and then discuss a strategy of an expansion plan to 20 more locations in new markets without selling franchise fees?
Love your content. Very practical
This is what most people pay to understand and then still don't. We explained Alex.
Yes👍
This information is a little difficult to perceive, but where it is difficult, there is growth. Thanks for this content!
These metrics have been huge for me & my clients at my ad agency (mainly LTGP : CAC ratio). Thanks for these gems brother!
Thankyou for doing this with or without your family.
I love this! Thank you for sharing!
Some user experience feedback, some of the captions are low contrast and hard to read.
So helpful immediately
It’s fun to watch the view count go up as I’m watching this vid lol. I’ll have to watch again and take notes next time. 👍
On point! Thank you Alex.
Thanks Alex for the Golden Nuggets of Wisdom!
If our biz has moved to less committal 1 off non recurring class packs (10, 20 and 50) how do i work out the ltgp across all pricing options we sell? Especially taking into consideration peeps jump in and out of our biz over the space of years.
Coming back after pregnancy/dropping out to try f45 or another option then returning/
Yes👍
Better than business school
nicely described
That beginning looked like that lecture meme
We also need a LTGP:CAC for high-ticket programs. which customers only pay 1 time. I tried to solve it myself and always ended up with LT = 1. But I also have employees who are paid only commission-based, I include them in the GP but then scratch my head on the CAC lol... can we have a video on that please?
I have this issue you to, in a toursim based business where our clients are in market 1, it becomes challenging to interept the LTGP:CAC ratio etc. @Alex Hormozi thoughts?
Hey Alex, does commission get added into into the CAC equation, as a part of Labor?
I invested few thousand dollars in some courses, that took months and month to learn what I’ve learned now for free in just 20 minutes. 😂
Thanks Alex.
Which courses are you referring to?
Awesome video, especially coming from a small RUclipsr.
Appreciate you fam.
Interesting audio cues
thank you so much , Gods Speed, Godbless you . such an genuine content . Thank you .more power,
Is there a playlist of these business lessons? If not I'll have to make one for my homeschooled kids when we start learning about business.
Any explanation for why Alex values a greater ratio of LTGP: CAC? Consider two businesses, their LTV is the same at $7 per customer. Business 1 has a COS of $2 & CAC of $1, giving LTGP/CAC of 5. Business 2 has a COS of $1 & CAC of $2, giving LTGP/CAC of 3.
Both businesses profit is the same at $4, however LTGP: CAC is vastly different, why should this matter?
Can someone do the math for me when he says LTGP will double when churn goes from 10% down to 5%? I don’t see how that would double it but I could be wrong.
Amazing. We applied these principles and we tripled our revenue last year! Thank you
Wasnt he uploading a video about money investing and took it down again? It showed it to me in my push notifications?
Can never get enough of Hormozi golden nuggets