The Metric Warren Buffet Cares Most About and How To Use it to Take Home More Cash | Ep 292

The Game with Alex Hormozi

Alex Hormozi

Entrepreneurship, Education, Business, How To

4.9 • 4.4K Ratings

🗓️ 15 April 2021

⏱️ 14 minutes

🔗️ Recording | iTunes | RSS

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Summary

Keep the cash flowing! Today, Alex (@AlexHormozi) talks about the number one mistake he says a lot of entrepreneurs make in terms of making more money. He also talks about the number one metric that he uses to track his businesses, and why you should follow this concept. if you're thinking about reinvesting in the business, make sure that the dollars that you're choosing to reinvest, you're getting the best return on capital you possibly can.

Welcome to The Game Podcast where we talk about how to get more customers, make more profit per customer, and keep them longer, and the many failures and lessons we have learned along the way to $100M in sales. We've got roll-up-your-sleeves kind of hustle with a little bit of cleverness and a lot of heart.

Timestamps:

(0:53) - the number one metric Alex uses to track his businesses is called Net Free Cash Flow

(3:48) - The reality is the chips are stacked against you. 99% of businesses don't get sold ever

(4:52) - The mistake a lot of entrepreneurs make is that they don’t focus on Net Free Cash Flow: “How can this business pump out profit? While I still continue to grow it?”

(6:17) - Net Free Cash Flow focuses the entire company on not just making a profit, but making a profit in access of what is required to continue to run and grow the business. Alex also shares two more important metrics: PE ratio & return on capital

(10:40) - We are all exposed to a factor we discount on a regular basis. It’s called “Operational Risk”

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Transcript

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0:00.0	Real quick, you guys already know that I don't run any ads on this and I don't sell anything.
0:04.6	The only ask that I can ever have are you guys that you help me spread the words.
0:07.8	We can not more entrepreneurs, make more money, feed their families,
0:10.9	make better products, and have better experiences for their employees and customers.
0:14.9	The only way we do that is if you can rate and review and share this podcast.
0:19.4	The single thing that I have to do is leave review.
0:21.9	I'll take you 10 seconds or one type of the thumb.
0:23.9	It would mean the absolute world to me.
0:25.2	More importantly, it may change the world of someone else.
0:28.4	Net free cash flow.
0:31.6	All right, say it and then imprint it into your minds.
0:35.2	Welcome to the game where we talk about how to get more customers,
0:37.5	how to make more per customer and how to keep them longer in the many failures and lessons
0:40.8	we have learned along the way.
0:42.0	I hope you enjoy and subscribe.
0:43.6	What's going everyone?
0:44.4	In this video, I'm going to show you the number one mistake that I made and that I see a lot of
0:48.1	entrepreneurs making in terms of how to make more money from their business.
0:52.8	So the number one metric that I track for our businesses is this one.
0:57.9	You may not even hover this one, but I think it is the most important and
1:02.1	Warren Buffett agrees with me.
1:03.6	All right, it's net free cash flow.
	...

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