How I’ve Made All of My Wealth In Business
Summary
- Focus on getting a high Lifetime Value to Customer Acquisition Cost (LTV to CAC) ratio to grow your business significantly.
- Aim for a minimum LTV to CAC ratio of 3:1 for growth, but the real profit surge occurs at 30:1 or higher.
- I've experienced a 100:1 ratio more than once, and it's during these times that I've built the most wealth.
- My gym initially had a 30:1 ratio, and our school, as well as Gym Launch, achieved a 100:1 ratio.
- High returns on advertising are crucial, and they come not just from being great at advertising but from having a high Lifetime Value for each customer.
- Recognize that a normal LTV to CAC ratio means a normal business, but exceptional ratios lead to extraordinary business success.
Video
How To Take Action
I would suggest focusing first on increasing your customer lifetime value (LTV). Here's what you can do:
- Find ways to provide more value to your customers. It could be an extra service, longer support, or more personalized attention that makes your customers happy to pay you more over time.
- Keep your costs down, especially in acquiring new customers. For example, focus on word-of-mouth and referrals—they don't cost a penny but can bring in loyal customers.
- Check up on your advertising. Are you getting a good return? If you're spending $1 on ads, you want to make sure you're making at least $3 back over the customer's life. But don't settle for $3; aim higher. If I can get $30 to $100 back for every $1 I spend, then I know I'm on the right track to big growth.
To get that 3:1 ratio or better, think about what makes your product or service special and how you can stand out.
Also, always keep an eye on the numbers. If you're not measuring your customer acquisition cost (CAC) and lifetime value, then start now. Use simple tools like spreadsheets to track how much you spend to get a customer and how much they're worth over time.
Remember, the goal isn't to be just "okay" at this. It's to be great. That's how you go from having a normal business to one that's really taking off. When my gym hit a 30:1 ratio and later, my other businesses hit 100:1, that's when I saw the most wealth build up. Every business can do this with the right focus and hard work.
Quotes by Alex Hormozi
"the only way that you really like grow really big you want to have 3 to1 LTV to CAC ratio"
– Alex Hormozi
"10 to1 is like okay we have a business it's profitable cool"
– Alex Hormozi
"where the money printing happens is like 30 50 100 to one"
– Alex Hormozi
"all of my wealth has been built on those four times"
– Alex Hormozi
"you just need to have insane Returns on adver ising"
– Alex Hormozi
Full Transcript
the only way that you really like grow really big you want to have 3 to1 LTV to CAC ratio 10 to1 is like okay we have a business it's profitable cool where the money printing happens is like 30 50 100 to one I've had it happen four times and all of my wealth has been built on those four times when I had my gym we're getting 30 to1 gym launch when we started we had 100 to1 school now we have 100 to1 and I'd say workshops were at very high unless I get there I just know this is going to be like a normal business it's not going to like be crazy you just need to have insane Returns on adver ising which either comes from being exceptional at advertising but more realistically having an exceptionally High LTV