CAC is the Customer Acquisition Cost and it is what you spend to get a customer. Lifetime Value is what that customer is worth over time. The most important ratio in your business is making sure the second number is significantly larger than the first. If it costs you $500 to acquire a customer who spends $5,000 with you over their lifetime you have a healthy business. If it costs you $500 to acquire a customer who only spends $400 you are paying to lose money. Know both numbers. Build the gap between them as wide as possible. That gap is your business.

A lot of new business owners celebrate hitting $100,000 in sales without asking the most important question. What did it cost you to make that $100,000? Revenue is the money coming in. Profit is what is left after you pay for everything it took to generate that revenue. Materials. Labor. Software. Marketing. Fees. Delivery. A business doing $100,000 a month with $95,000 in expenses is not a $100,000 business. It is a $5,000 business working very hard. Know both numbers. Always. What is your current profit margin? Drop it in the comments.

The best business ideas do not come from brainstorming. They come from pain. Here is the simplest way to find your idea. Ask yourself what problem you are dealing with right now that is frustrating enough that you would pay someone to fix it. Now ask yourself one of two questions. Does a solution exist? If nobody is solving this problem yet you may have found a real gap in the market. That gap is your opportunity. Does a solution exist but you are not satisfied with it? This is actually the better scenario. If a competitor is already selling something and people are still not happy that tells you three things. The problem is real. People are already paying to solve it. And the current solution is not good enough. Your job is simply to solve it better. Faster. Cheaper. Or for a more specific customer than anyone else is currently serving. Most new founders are scared of competition. The smart ones understand that competition is proof the market exists. You do not need to invent something brand new. You need to solve something real in a way that makes every other option feel like a compromise.

Many business owners have to broad of a target market. The more specific you get the more your customers will be easy to find. The more specific you get the more your customers will find you. The more specific you get the more you can charge. Example: I service health and beauty businesses. vs. I service spas vs. I service med spas vs. I service med spas in the southeast region vs. I service med spas in Atlanta vs. I service med spas in Atlanta with more than one location and $5M in sales.