How do I know if my business would be profitable? Episode 5

In this episode Emeka and Uwa discuss crucial points that must be considered in deciding if a business is worth pursuing.

Specifically, we address "Cost of Acquisition" and "Customer Lifetime Value".

Cost of Acquisition is essentially how much it would cost to get a customer to use your site or app. Costs include fees for advertising, marketing and follow-up.

Customer Lifetime Value is the total amount of money a customer will spend on your site before moving onto other things or unsubscribing from your service.

I ask probing questions about the Lifetime Value and why it is even necessary.

Business Update:

Emeka and Uwa give an update on how their businesses have faired this week.

Both had issues achieving their targets and one of us actually unilaterally changed the goal :-o

Issues Included:

1. Developers not responding in a timely manner thereby jeopardising the goal for the week
2. "Overwhelm" - due to the sheer weight of the tasks that are yet to be done
3. We ask questions about the finance model for one of the apps
4. Setting more reasonable and achievable goals for the week
5. One of the founders has decided to make his app free or follow a "freemium" model :-) So now he needs to write code to handle this change

This is our best episode yet. Listen and enjoy.

Send us questions, comments or any other feedback.

Useful Links

https://blog.hubspot.com/service/how-to-calculate-customer-lifetime-value

https://medium.com/swlh/5-simple-ways-to-calculate-customer-lifetime-value-5f49b1a12723