Business Cheat Sheet

Sun, 28 Sep 2025 11:52:00 +1000

A glossary of the key terms, acronyms, and ratios commonly considered business basics.

Finance and Metrics

Term	Description
Accrual Accounting	Records revenue when earned and expenses when incurred, regardless of cash movement - gives a truer picture than cash accounting
ARPU	Average Revenue Per User: Revenue ÷ total customers Useful in SaaS
B2B	Business to Business: Selling to other companies Often longer sales cycles, higher ticket
B2B2C	Business sells to another business that serves end consumers (eg, Shopify → merchants → buyers)
B2C	Business to Consumer: Selling directly to end users Usually higher volume, lower ticket
BAMFAM	Book A Meeting From A Meeting: Sales discipline to never leave a conversation without scheduling the next step [100M Closing Playbook §Closes]
Bottom Line	Net profit after all expenses; the final measure of profitability.
CAC	Customer Acquisition Cost: Total cost to acquire a new paying customer (ads + sales + marketing overhead ÷ new customers) [100M Leads p208]
Churn	% of customers who cancel in a given time period Inverse of retention [100M Retention Playbook §Churn Math]
Churn Rate	Percentage of customers lost over a specific period.
Close Rate	Percentage of leads or prospects that convert to paying customers.
COGS	Cost of Goods Sold: The direct cost of purchasing the goods a company sells, and it is a key expense that directly impacts profit. It includes expenses like raw materials, direct labor, and manufacturing overhead, but not indirect costs like marketing or salaries.
Cost to Value	The perceived value must significantly exceed the price paid; customers buy when the benefit outweighs the cost
CRO	Conversion Rate Optimisation: Improving the percentage of visitors who take a desired action (e.g., purchase, sign up).
EBITDA	Earnings Before Interest, Taxes, Depreciation, and Amortization: A cleaner view of profitability before financial structuring
FCF	Free Cash Flow: Cash left after operating expenses + capital expenditures Critical because cash pays bills, not “profits” [100M Money Models p233]
Funnel	The stages a prospect moves through before becoming a customer (e.g., awareness, interest, decision, action).
Grand Slam Offer	Offer so good people feel stupid saying no [100M Offers p22]
Gross Margin	(Revenue – Cost of Goods Sold) ÷ Revenue High gross margin = scalable business
Gross Margin / Gross Profit	The revenue remaining after deducting the Cost of Goods Sold (COGS).
Gross vs Net	Gross = before costs (top-line) Net = after costs (bottom-line)
Industry CAC Benchmark	Varies heavily Rule of thumb: aim for CAC ≤ 1/3 of LTGP [100M Leads p208]
Lead Magnet	A valuable piece of content or service (e.g., a free PDF guide, training video, or consultation) offered to a prospect in exchange for their contact information.
LTGP	Lifetime Gross Profit: LTV × Gross Margin % More accurate than LTV since it accounts for cost of goods sold [100M Money Models p228]
LTGP:CAC Ratio	Healthy is ~3:1 (spend $1 to acquire, get $3+ in gross profit) If <1:1, you’re losing money; if 10:1, you’re under-investing [100M Leads p208]
LTV	Lifetime Value: The total revenue expected from a customer over their relationship with you [100M Money Models p226]
Marketplace	Connects buyers and sellers, takes a cut (Airbnb, Uber)
Net Margin	Net profit ÷ Revenue Bottom-line profitability after all costs
Offer	The combination of a product or service, its price, payment terms, incentives (bonuses), and guarantees presented to a prospect.
Online Ads Attribution	The process of identifying which marketing touchpoints (e.g., specific ads, campaigns, or channels) were responsible for a customer’s conversion or purchase.
Outbound Outreach	Proactively reaching out to potential customers via calls, emails, or ads.
Recurring/Subscription	Predictable monthly revenue Gold standard for valuations
Return on Ad Spend (ROAS)	The revenue generated for every dollar spent on advertising. Calculated as: (Revenue from Ads / Cost of Ads).
Risk Reversal	Guarantees that shift risk from buyer to seller [Playbook – Guarantees §Hard Guarantees]
Sales Velocity	A measure of how quickly a business can move qualified leads through its sales pipeline and turn them into customers, and how much value those customers represent.
Scarcity/Urgency	Limiting supply or time to push action [100M Offers p113]
Ticket Price	The price paid for a product or service; often refers to average sale amount.
Top Line	Total revenue before any costs or expenses are deducted.
Transactional/One-off	One-time purchases, low predictability
Value Equation	(Dream Outcome × Perceived Likelihood of Achievement) ÷ (Time Delay × Effort & Sacrifice) [100M Offers p47]

Healthy Business Ratios

Ratio	Amount	Description
LTGP:CAC	> 3:1	3:1 is the minimum healthy rule of thumb [100M Leads p208]
Churn	< 5% monthly	Strong retention [100M Retention Playbook §Churn Math]
Payback Period	≤ 12 months	CAC recovered within a year [100M Lifetime Value Playbook §Payback]
EBITDA Margin	15–30%	Common range for service & SaaS businesses

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Finance and Metrics

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