7 Ways To Measure Business Value | Ep 313

The Game with Alex Hormozi

Alex Hormozi

Education, Entrepreneurship, Business, How To

4.9 • 4.8K Ratings

🗓️ 1 July 2021

⏱️ 20 minutes

🔗️ Recording | iTunes | RSS

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Summary

Do you know your true value? Today, Alex (@AlexHormozi) talks about the criteria people tend to use when evaluating the worth of an entrepreneur and which of these are the most practical to use.

Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.

Timestamps:

(0:54) - Contract Value: What you’re offering

(2:34) - Revenue Over Lifetime & Business Valuation: Total sales and business worth

(7:21) - Actual Yearly Revenue & Yearly Profit: Cash collected and excess/profit

(10:17) - Owner Earning & Net Worth: Net free cash flow and owner value

(13:44) - Alex's rankings on these common ways: Best and worst

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Transcript

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0:00.0	Real quick guys, if you can think about how you found this podcast, somebody probably
0:03.8	tweeted it, told you about it, shared it on Instagram, or something like that.
0:07.5	The only way this grows is through word of mouth. And so I don't run ads, I don't do sponsorships,
0:12.2	I don't sell anything. My only ask is that you continue to pay it forward, do whoever showed you,
0:16.4	or however you found out about this podcast that you do the exact same thing. So if it was a review,
0:21.0	if it was a post, if you do that, it would mean the world to me and you'll throw some good comment
0:24.3	out there for another entrepreneur. In this video, I'm going to show you the seven ways to measure
0:28.2	business value and how you're probably being deceived by most people you see on the internet,
0:33.9	simply because you're not understanding the words and terms they are using. All right, so by the
0:38.0	end of this video, you'll understand who's BS, who's legit, who's real, who's fake, and if they
0:42.0	haven't given you enough information to make the decision, exactly what questions to ask.
0:46.7	Welcome to the game where we talk about how to get more customers, how to make more
0:49.6	customers, how to keep them longer in the many failures and lessons we have learned along the way.
0:53.4	I hope you enjoy and subscribe. In this video, I'm going to show you the seven ways to measure
0:57.5	business value and how you're probably being deceived by most people you see on the internet,
1:03.2	simply because you're not understanding the words and terms they are using. All right, so by the
1:07.3	end of this video, you'll understand who's BS, who's legit, who's real, who's fake, and if they
1:11.4	haven't given you enough information to make the decision, exactly what question is to ask. All right,
1:16.1	so let's dive in. So the first of the seven types of ways that people measure value is that they
1:21.5	will extrapolate a single month of contract value into eternity or at least over a year. And so
1:26.4	for example, what that looks like is someone selling a yearly contract at an event, they sell 100
1:33.5	people at that event, let's say for $30,000 a year, right? And they say we're doing $3 million
	...

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