How I Would Build a Business in 2025 (If I Had to Start Over)

Summary

• I’ve learned that business success isn’t about chasing the latest tactic or method—those always expire. What truly matters is the model you build. You need a model that allows you to make more money from a customer than your competitors do.
• The number one rule in business is simple: don’t run out of money. Cash flow is the lifeblood. As long as you manage your cash and keep money coming in, you can stay in business forever. Most businesses don’t have outside investment and are bootstrapped, so you have to build a cash-flowing business from the start.
• Early on, I noticed that most gym owners were running “low barrier offers” like $21 for 21 days. I flipped the script and ran six-week challenges where I’d get $600 upfront, another $200 in upsells within 48 hours, and around $2,000 more at week three as a prepayment for the year. On average, we’d collect about $1,000 per customer within the first 30 days, compared to just $21.
• Because I was earning so much more per customer within a short time, I could outspend all my competitors on ads. This let us dominate market share because I could afford to pay more to acquire each customer, creating a kind of legal monopoly over my market. If you’re making $1,000 for every $100 you spend getting a customer, there’s almost no marketing budget—you spend as much as you can to make more.
• With my model, I could open each gym location at full capacity from day one. I’d put $5,000 into a new bank account, run $100 in ads a day (getting 10 leads, closing 2 leads at $600 each), and watch that cash stack up. Sometimes, I’d even ramp up to $500 a day in ads to generate $100,000 in sales before opening. That covered almost all my startup costs (equipment, signage, paint, lobby, weights) so the gym was paid for before it ever opened.
• Six weeks after opening, those customers would roll into recurring memberships, and the business was cash-flow positive almost immediately. This process let me open six locations in my early 20s—all financed by fast, upfront customer payments.
• Here’s the core concept: you need to know two numbers—how much a customer is worth to you in the first 30 days (LTV or Lifetime Value) and what it costs to acquire them (CAC or Customer Acquisition Cost). Ideally, your LTV is much greater than your CAC.
• Most small businesses can’t handle waiting longer than 30 days to recoup their investment, and credit cards only give you 30 days of free money, so make sure your payback period fits that window.
• To find your CAC, just add up everything you spend on marketing, sales commissions, and advertising for a year and divide by the number of new customers. For LTV, take your lifetime revenue per customer, subtract your total cost to deliver, and get your gross profit per customer.
• You want the LTV-to-CAC ratio as high as possible. “Silicon Valley smart guys” say 3:1 is ideal, but that only works if your lead generation, sales, and fulfillment are all automated. If only two are automated, go for 6:1. If only one, aim for 9:1. If none are automated (meaning it’s all manual), you need at least 12:1 to have enough profit to handle the messiness of scaling.
• As your business grows, customer acquisition costs go up. You start by serving your “warm” market, but as you ramp up, you pay more for “colder” leads and you add more staff and infrastructure, which adds cost and reduces efficiency for a while. That’s why you need that bigger LTV:CAC buffer.
• To improve your LTV:CAC ratio, you can:
  • Raise your prices.
  • Decrease your costs (buy in bulk, negotiate better terms, automate tasks).
  • Add upsells, down-sells, and cross-sells (sell more to each customer during or after the sale).
  • Offer financing or change payment terms to pull cash forward.
  • Add complementary products or services (e.g., sell chairs with a table, warranties, or upgrades).
• You should be able to look at any product or service you offer and immediately come up with ways to increase customer value or lower costs. If you can’t do this, you don’t understand your business well enough.
• A mistake most business owners make is chasing cheaper leads, thinking the goal is to minimize CAC. That’s not the case—you want to maximize your profit per customer even if it means paying more for high-quality leads.
• Instead of focusing on methods or quick fixes, focus on building a robust model that lets you spend more to acquire customers than your competition, ensuring a long-term advantage.
• You can also lower CAC by improving your offers, making better ads, optimizing your sales funnels and scripts, split-testing your sales process, and advertising in lower-cost places—but only if these changes don’t sacrifice quality.
• Don’t fall into the trap of thinking you want the cheapest customers. Sometimes, it’s worth spending more to get a customer who spends much more in return. A 10:1 return spending $500 to get $5,000 is much better than spending $200 to get $1,000.
• Everything in business changes once you truly internalize this core ratio and start making decisions around it. Growth, sustainability, and reinvestment all hinge on you understanding and managing the balance between LTV and CAC. That’s what I wish someone had made crystal clear to me in year one.

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How To Take Action

I would suggest implementing the most important thing first: know your numbers. Start by taking a piece of paper or a spreadsheet and write down two things—how much profit you make from each customer in the first 30 days (LTV), and how much you’re spending to get each customer (CAC). Just add up all your marketing, ads, and sales costs for last year and divide by the total number of new customers. That gives you your customer acquisition cost. Then, look at the average gross profit per customer—that's your LTV. This is third-grade math, but it's the key to understanding your business.

A good way of improving this ratio is to either raise prices, add upsells or extra services, and cut your costs. For example: can you bundle services or products, offer a premium version, or get discounts by buying in bulk? Could you make a new offer where customers pay more upfront, or pay for the year in advance with a discount? This gets more cash in your pocket quickly and lowers risk.

Don’t fall for the trap of chasing cheap leads. If you’re making much more from each customer, you can spend more on ads to bring in higher quality clients. That lets you dominate your market, even if your competition tries to undercut you.

Finally, review your offers, ads, and sales process—split-test and optimize what already works instead of looking for fancy new hacks. Focus on making your core business model stronger. Whatever business you’re in, these changes are fast, affordable, and can make a huge difference in profit and growth.

Quotes byAlex Hormozi

"And so, let's think about the number one rule of business is don't go out of business"

– Alex Hormozi

"Methods are like onetrick ponies"

– Alex Hormozi

"So fundamentally, the business that can make more money from its customer than its competitors wins"

– Alex Hormozi

"If you can spend more to get customers than your competitors can, you win"

– Alex Hormozi

"Everything in business changes once you understand this"

– Alex Hormozi