Do you think in terms of ROI?

3 replies
It amazes me how many people still forget the basic principal of ROI.

If you approach any business spend from the right angle, following research, 'shopping around' and a diligent cost/benefit analysis - 99% of your outgoings will result in a healthy return.

Speaking with friends who run businesses, I frequently hear people afraid to pump some money into their web design or publicity as they can only see the outgoing side of things. They fail to think about the return that investment can bring them.

These are the same people who must always have the latest laptop, the latest iPhone and play the lottery each week (did you know that, per lottery player, the average return over your lifetime in terms of winnings is less than $200?). They'll gadly pump money into those avenues - but won't invest in their own business.

When thinking of ROI, don't feel it's only a worthwhile investment if you're paying big bucks for something. No, no - You can make just a couple of dollars here and there amount to a healthy return if you don't rush into the spending and diligently analyse the return it could bring your business.

I started my first business six years ago using just $3000 that was 'loaned' to me by a family member, on the condition that I gave the money back no earlier than two years later, with no interest required. You've gotta love Moms!

By learning all I could about spending for business, I managed to turn this $3000 into what is today a very healthy full-time business, with no requirement for me to think about returning to paid employment.

I'm not saying this to boast, rather the total reverse. If, six years ago, you had told me it would have worked I would have laughed. I thought 'To start a business you need to be a ruthless deal maker who can secure a wicked bank loan of tens of thousands of dollars - buy a big spinning chair, shine my car up and rent an office with wood panels on the walls'.

In reality, the key was to just grow slowly by ensuring that I put money into areas that would have a good chance of a healthy return in terms of increased business.

Now, I do accept that we all spend money and see no return, or even a loss. It's just one of the roundabouts of owning and operating a business.

However, if you start to make every decision in terms of ROI - you will find you spend more. However, you'll also find you get back more than you put in.

So, in light of the above, how often do you think about ROI?
#roi #terms
  • Profile picture of the author Torreylee
    Yup, I ALWAYS consider ROI in relation to both my money and my time. Shoot, TIME IS MONEY, therefore if I know that spending money to get a time-consuming job done will afford me time to work on more "time-profitable" tasks. I outsource it and gladly. Because the RETURNS in the form of more income is what my primary goals is from the outset of any project. It only makes sense...

    I takes time as well as trial and error to get it down to a science, but understanding the principles of ROI are what has made it possible for me to grow and expand my brand and my business.

    As they say "It takes money, to make money".
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    • Profile picture of the author JimMichael
      Originally Posted by Torreylee View Post

      Yup, I ALWAYS consider ROI in relation to both my money and my time. Shoot, TIME IS MONEY, therefore if I know that spending money to get a time-consuming job done will afford me time to work on more "time-profitable" tasks. I outsource it and gladly. Because the RETURNS in the form of more income is what my primary goals is from the outset of any project. It only makes sense...

      I takes time as well as trial and error to get it down to a science, but understanding the principles of ROI are what has made it possible for me to grow and expand my brand and my business.

      As they say "It takes money, to make money".
      Nicely said, Torreylee. ROI in terms of time is also vitally important. Glad to see the concept is working fot you!
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  • Profile picture of the author trustedWFhelper
    I do have non-profit project, its a definitely negative roi but I feel happy.
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