Alex Hormozi shares twelve rules of thumb for business analysis, emphasizing the relationship between metrics rather than fixed values. He begins with close rates versus pricing, suggesting businesses often underprice their offerings. Hormozi then discusses lifetime value (LTV) in relation to customer acquisition cost (CAC), advocating for higher ratios (6:1, 9:1, or 12:1) when human involvement increases in attraction, conversion, or delivery. He introduces the "Rule of 100" for consistent business growth and stresses the importance of quick lead response times to maximize sales. Other rules of thumb include aiming for 70% sales team utilization, a 30-day payback period for customer acquisition costs, and gross margins of at least 80% for service-based businesses. He also highlights the significance of customer retention and strategies for accelerating cash flow through prepayments and financing options. Finally, he argues against using industry averages as benchmarks, encouraging business owners to aim for exceptional performance.
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