ROI, return on investment is an important matter to consider when you’re making choices about how you spend time and energy in your business.
If you choose to spend that energy on something with little or no return, then your energy is wasted. Your energy as an entrepreneur is one of your most precious assets. So, evaluating ROI is crucial when you make decisions about how to proceed.
You can think of it like an equation. When the return, the benefit, the outcomes are greater than the time, energy, and resources you spend, then you’ve got a positive ROI. That’s a good thing!
There are a lot of ways to evaluate ROI. They aren’t all going to be monetary, though that is of course an essential aspect to consider. Other considerations include building visibility for your brand, supporting your community of prospective clients, and making contacts who can help you connect to a group of your ideal clients and customers.
When you have a decision to make about how you’re going to invest your time, energy, and resources, do a ROI evaluation. Write down any costs that will be involved, including money, and how much time. Then write down all the benefits, the possible outcomes that are likely given you are choosing to make this investment. Rank them in the order of likelihood, with the most likely first.
Consider also what it will mean to other things you have planned or are considering. Will this benefit your business more than those other things? You may have to choose where you put your resources, at least in the short term.
When you see this picture laid out, you’ll be able to make a better decision.
ROI isn’t necessarily going to be immediate. Not everything is going to have a quick return. That doesn’t mean you shouldn’t do it. Just think long-term about what the outcomes are likely to be, and see if it’s worth it.
Offering a bonus, for example, may cost you in the short term to create it and ship it. But, if it helps you build rapport and relationship with your customer, then it can be worth it. What will that mean in terms of customer lifetime value, the potential for them to buy what you have to offer over their lifetime. Will the bonus enhance that?
Once you’ve made your decision, when you make your investment, do it wholeheartedly. Being all in will increase your chances of a better return. Moving ahead half-heartedly because you’re afraid it won’t pay off will dilute the return.
Success doesn’t just come to you. You have to invest in order to achieve it.
Invest your time, money, effort, creativity, intelligence, and heart in the right place, and you’ll get a return on your investment that will benefit your business.
How have you evaluated possible outcomes, your ROI? Share in the comments below!
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Here’s your Alchemy Assignment, your chance to transform what you learned in this article into awareness and action for you and your business:
Use the method described in the article to evaluate the ROI of an upcoming decision. Attach as many specifics as you can at this point: money, number of hours, outcomes, etc. The more specific you can be, the easier your decision.