13. Levels of Customer Financed Acquisition | $100M Lost Chapters Audiobook

Levels of customer financed acquisition. By connecting gross profit, GP, and speed with CAC, cost of acquiring customer, I see three levels of customer financed acquisition, or CFA. CFA level one. You make less gross profit from a customer than it costs you to get one in the first 30 days. You eventually come out ahead, it just takes longer.

This means floating your business on life savings, loans, and lines of credit, a big risk, and speaking from lots of experience, it sucks. And yes, you can absolutely make money this way over the long term. And many big businesses make all their money this way, but you have to already have lots of money to do it. And most young bootstrap businesses don't. So I avoid this from starting out.

CFA level 2. You make the same profit from a customer as it costs you to get one in the first 30 days. I specified 30 days because any business can get interest-free money for 30 days in the form of a credit card. If you clear your balance before the end of the month, it works just like normal money. So you can just use credit to get a customer, pay it back, and then use it again to get the next customer.

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