# Investor Boils Down Business Growth to Simple Math

## Метаданные

- **Канал:** Alex Hormozi
- **YouTube:** https://www.youtube.com/watch?v=BSwJQsogah0
- **Дата:** 30.03.2021
- **Длительность:** 9:43
- **Просмотры:** 171,535
- **Источник:** https://ekstraktznaniy.ru/video/16693

## Описание

Download your free scaling roadmap here: https://www.acquisition.com/roadmap-yta60
The easiest business I can help you start (free trial): https://www.skool.com/hormozi
Business owners: Want to scale faster? We provide in-person advisory for companies doing at least $1M per year: https://www.acquisition.com/workshop-yta60

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 $250,000,000+ 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: Close

## Транскрипт

### Intro []

what's going on everyone i've got a fun topic today how to make a million dollars and so i know this is uh almost clickbaity uh but i want to uh go over it mostly because it's like one of the number one questions i get all the time and so we might as well actually break down the math for you and so the number one way

### Know the math [0:16]

that i know that someone has no chance in actually doing this is they don't even know the math behind how to accomplish their goals right and so that's what we're going to break down today all right so the first thing is you have to know how many units or whatever it is you're selling to get to your goal right and the question is do you want to make a million dollars in revenue or take home income mind you to be in the top one percent in america it's four hundred thousand dollars a year all right and so let's say you have a business that runs 40 net margins which mind you is very good um if you run 40 at margins that means if you made a million dollars in revenue you would make 400 000 a year in net profit what you get to take owner pay right from your business which is why by the way i think that having a job that pays well is very underrated i think it's just from being realistic if you look at the odds i think it's far far more likely that you can achieve a six-figure or multi-six-figure income fast by having a really high-paying job because you've acquired a skill then trying to learn basically all the skills and own your own business i'm just being candid and i think that if i knew the amount of risk that i was taking on when i started business i don't know if i would have done it again and i think that i had an atypical entrepreneurial journey because i wasn't really an entrepreneur personality type i just really hated my job enough that i was going to do anything but that and so that's what started it

### Price points [1:33]

but let's get to that let's get to the mean the potatoes all right so a lot of times people haven't even figured out their price points on things yet and so the easiest way to understand this is that if you have a million dollars a year which is what you want to make then you want to break this down right so a million dollars a year is going to be 83k per month all right roughly right it's 83 333 whatever you could say 84k but 83k per month all right that's what you have to make in uh revenue right now if you break it down per day i think it's three three three i think um per day but if you do it per week so let's just break this into weekly uh it would be like let's just say 21k okay so 21k per week all right and you'll notice i'm gonna keep breaking this down because it's really difficult to hit fuzzy targets right i heard this from jason flatland fuzzy targets don't get hit right so we need to make this a very precise clean pristine target all right so we got a million dollars a year breaks down to 83k per month 21k uh per week excuse me 21k per week and then from there you know seven days would be about 3k plus per day right so that's how we know how we can get to that number now i like weeks because weeks are like normal cycles daily can be a little bit too volatile until you get to like 10 feet you know uh 10 million plus per year um and so if we're talking starting out right 21k per week all right so the thing is we just have to know what the lifetime value of our customer is and so let's say you're selling a single product that has no upsells right which is pretty common um a single product that has no upsells let's say your ltv is a thousand dollars okay now i want to be really clear about this you don't have to sell a thousand dollar widget for this for the math that i'm about to share with you to make sense all right it just means that your total lifetime value of a customer is a thousand dollars like starbucks i think their ltv's like eight thousand dollars and you're like holy cow well think about how many times you purchased the starbucks over the last you know 10 years right it adds up and so for me i'll give you a couple different examples of what a thousand ltv might be if i sold a course for a thousand dollars and i sold nothing else that would be 1000 ltv if i sold a 100 a month gym membership and the person on average stays ten months that would be a thousand dollar ltv if i sold uh let's say ah crap skin care products right and the average order value was you know 250 and the average amount of time that someone stayed on my cream products was four months one thousand dollars was my ltv okay so these are all different ways of achieving a thousand dollar ltv which makes this hopefully a little bit simpler now if i have to

### Sales [3:56]

get to a million dollars then i need to sell 21 units per week right and so that would be 21 divided by a thousand which is 21 right units per week to hit our goal and so if i know that i only really sell five days a week monday through friday right then it means i got to sell four or maybe five i'd probably make five my goal so i overshoot it a little bit so i gotta sell five deals a day right and if i have and the nice thing is with this process that i'm walking you through right now like you can add as many zeros as you want it works the same way right you can add zeros to your product zeros to your goal like everything works the same way so it's five deals a day is what i have to close now the thing is i may know my math right and know that five deals a day we close let's say one out of three phone calls which means i'm going to do 15 phone calls a day who show up right and now if i'm selling products and it might be based on site conversion so if i have like you know one percent conversion on my store an e-commerce store for example then i would need a hundred times the amount of sales i need right so if i need five quote sales per day with an uh the lifetime value of a thousand and i know that it takes a hundred clicks to get one purchase then i need 500 clicks a day hopefully that makes sense here but i'm just walking through a more service-based sale because it was top of mind all right so 15 calls right per day and let's say that i know my show up rate on these calls is you know 66 so i'd have 22 set appointments per day right and the thing is i know that based on my either outreach efforts it takes let's say i don't know 50 outreach efforts to get one appointment i need a thousand outreach efforts a day right now mind you a thousand dollar deal would not be worth any kind of effort like that so because this is way too low to have kind of like a hand-to-hand combat uh sale type system um this would probably need to be closer to like ten thousand dollars um and then there you go you get your 10 million but i'm using this just to illustrate uh like the different ways to get there right and so um a nice thing to think about this is that if you take out if you take this little number here your deal size right and you put that as the main variable for this process right you could either sell you know nine 10k deals per month and have a million dollar business wow right you could sell one 100k deal per month to have a million dollar business that sounds pretty chill you could also sell 100 well roughly you know 83 right 1k deals per month that sounds a little harder right or if you have hundred dollar widgets you got to sell god 830 right or 33 whatever it is times 100 per month to hit that 83k right and so you can kind of see how much harder it gets the lower the price like it's hard to sell 833 things every month i mean that's a lot of work right and honestly it's hard to sell 83 things a month selling nine easier right and so it's been this is just the conclusion that i've made throughout my life is that especially when you're starting out i think it's easier to start with premium things as in like it's easier to just over deliver like crazy for a client rather than trying to think about like how do i make this scalable it's like you don't need to worry about that yet like you need to just start making money right and so it's like how can i just how can i find a sweet spot in here right this like five thousand ten thousand fifteen thousand dollar mark how can i find a sweet spot in here where i can just provide tremendous value to someone um that they will want to continue to do services with me and i don't have to have a tremendous amount of operational skill because the reason that this is so hard for people this hundred dollar month or even ten dollar month range is it's the operations behind it you have to be able to support so much volume uh that you're very good with people and that's a totally different skill than learning how to market and sell and acquire customers and so this is where i think most people kind of run into trouble and why a lot of people who end up making more money earlier kind of focus on this upper side of the ladder there's a very very few exceptions of people who uh make a lot of money like super rare below this thousand dollar um you know per unit price tag right like you have to find a way to get your ltv higher because it's just too hard like acquiring customers is just too difficult to not have a high ltv and like i said starbucks right 8000 ltv so it doesn't have to be your ticket price that has to be low it's just like you have to find ways to make customers worth more right unique expensive sticky air if you remember that from before habit forming something that they want to continue to come back again and again so anyway how to make a million dollars i think most people do not do this math on this which is you got to make twenty one thousand dollars a week and then there's a zillion ways to make twenty one thousand dollars a week right you can sell hundred dollar units you can sell a thousand ten thousand units because a hundred thousand dollar units um but at the end of the day that is how you do it and if you're thinking about this from a sales professional standpoint so i'll break this down for you guys as a bonus because i know a lot of sales people follow our stuff um make this whatever your product is your commission right so if you want to make a million dollars as a salesperson right then you need to sell like unless you get a thousand commission then you need to sell 83 units a month of your thing right and that may sound crazy and that it is because that's why you know that's why the top one percent is you know half of that in terms of income right and so uh but if you can figure out that a thousand dollars you know if you can get your like you should be able to think in your mind like this is my income goal as a salesperson this is what i would like to make is the amount of calls you know or calls taken required to hit this goal uh reasonable right because on some level every position has a cap based on time right how much time you could allocate right there's only 24 hours in a day and so anywho reverse the math on your own business and your own products that you're selling and a lot of times this will help you get your goals a lot faster so anyway keeping awesome lots of love and i'll catch you guys soon bye