Alex Hormozi: $100M CEO Explains: How To Make $1,000,000/Yr

Last updated: Jun 14, 2023

The video is about how to make a million dollars a year, breaking down the math behind it and explaining the importance of knowing the lifetime value of customers.

This video by Alex Hormozi was published on Mar 30, 2021.
Video length: 09:44.

In this video, Alex Hormozi explains how to make a million dollars a year by breaking down the math behind it.

He emphasizes the importance of knowing the number of units or products needed to reach the goal and whether the goal is revenue or take-home income. He also discusses the lifetime value of a customer and how to achieve a thousand-dollar LTV. Hormozi provides examples of different ways to achieve a thousand-dollar LTV and how to calculate the number of units needed to reach a million dollars a year.

He also discusses the importance of setting precise targets and breaking them down into manageable goals.

  • Knowing the math behind achieving goals is important.
  • Breaking down the numbers into weeks is better than days.
  • Understanding lifetime value of customers is important.
  • Ways to achieve a thousand-dollar lifetime value include selling courses, gym memberships, and skincare products.
  • Knowing math and closing deals are crucial to achieving goals.

$100M CEO Explains: How To Make $1,000,000/Yr - YouTube

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Knowing the Math Behind Making a Million Dollars

  • Knowing the math behind how to accomplish your goals is important.
  • Knowing how many units or whatever you're selling to get to your goal is crucial.
  • Knowing whether you want to make a million dollars in revenue or take-home income is important.
  • Running a business with 40 net margins means making 400,000 a year in net profit if you make a million dollars in revenue.
  • Having a job that pays well is underrated and can help achieve a six-figure or multi-six-figure income fast.
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Breaking Down the Numbers

  • A million dollars a year is 83k per month and 21k per week.
  • Breaking down the numbers into weeks is better than breaking them down into days.
  • Knowing the lifetime value of your customer is important.
  • Starbucks' lifetime value is around 8,000 dollars.
  • Having a thousand-dollar lifetime value means that the total lifetime value of a customer is a thousand dollars.
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How to Achieve a Thousand-Dollar Lifetime Value

  • Selling a course for a thousand dollars and selling nothing else.
  • Selling a 100 a month gym membership and the person on average stays ten months.
  • Selling skincare products, and the average order value is 250, and the average amount of time that someone stayed on the cream products was four months.
  • To get to a million dollars, you need to sell 21 units per week.
  • If you only sell five days a week, then you need to sell four or five units per day.
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$100M CEO Explains: How To Make $1,000,000/Yr - YouTube

Knowing Your Math and Closing Deals

  • Knowing your math is essential to achieving your goals.
  • Closing five deals a day means doing 15 phone calls a day who show up.
  • If you have a one percent conversion rate on your e-commerce store, you would need a hundred times the amount of sales you need.
  • Adding zeros to your product and goal works the same way.
  • Knowing how to close deals is crucial to achieving your goals.
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Section 1: Breaking Down the Math

  • It takes 100 clicks to get one purchase.
  • 500 clicks a day are needed to make a thousand-dollar deal worth the effort.
  • 15 calls per day with a 66% show-up rate result in 22 set appointments per day.
  • 1,000 outreach efforts a day are needed to get one appointment.
  • A deal size of $10,000 is needed to make a $10 million business.
  • It's easier to start with premium things and over-deliver for a client than to worry about scalability.
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Section 2: Importance of Knowing Lifetime Value of Customers

  • Find a way to get the lifetime value (LTV) of customers higher because acquiring customers is too difficult without a high LTV.
  • Starbucks has an LTV of $8,000, so it doesn't have to be the ticket price that's low.
  • Find ways to make customers worth more by being unique, expensive, sticky, and habit-forming.
  • To make a million dollars, you need to make $21,000 a week, and there are many ways to do that.
  • If you want to make a million dollars as a salesperson, make your commission your income goal and figure out how many units you need to sell to reach that goal.
  • Reverse the math on your own business and products to help you reach your goals faster.

Watch the video on YouTube:
$100M CEO Explains: How To Make $1,000,000/Yr - YouTube

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