Don’t you just love those words? RETURN ON INVESTMENT. It’s a sign that the money you have put into your business is miraculously coming back to your pockets AND then some. It’s a beautiful thing indeed. One thing needs to be clear though, this doesn’t happen magically on its own the way it sounded in the beginning of this blog post. Return on investment comes from research that laid the groundwork for detail oriented projects. Excellent execution and constant adjustment are all ingredients of a good return on investment. Here are a few things you need to know about return on investment and how to boost yours as you go into the last two-quarters of the year.
- ROI Formula
The first thing you will need to know about boosting your return on investment is to be knowledgeable about how to calculate the formula. Return on investment is: Net Profit/ Investment * 100 = expressed as a percentage. For example, if you spent $50 getting your blog set up and have made $300 in your first month of operations, your return on investment will be calculated as 250/300 *100 = 83.3%. Keep in mind that your Net Profit is your income minus your expenses. 83.3% is a high return on investment, and that is what you want. Now we can discuss how to achieve a high percentage and maintain numbers.
- Save more money
One way to boost your return on investment is to save more money by spending less. Think of what services you may be spending money on that you can automate, for example, social media management. If the learning curve is not that large for you, you can consider spending less money monthly by utilizing a scheduling app versus hiring an independent contractor. When you save money your profit margin becomes larger and thus your return on investment increases. While cutting out unnecessary services saves money, be mindful that you may also loose time by gaining new responsibilities and certain services are more than worth paying for such as a business coach or branding coach because these services are usually worth their weight in gold literally and pay for themselves.
- Automate operations to optimize your time to take on new projects
In addition to trimming the fat in the money spending arena, utilizing other daily tasks to save yourself some time could also increase your return on investment. When you automate things like email, the amount of time you save can be used to take on new projects and increase your income. Skim through your business operations and do some research on time-saving and efficiency tips.
- Collaborate with like-minds
This is a biggie! Two brains are better than one. When you find someone what like-minded, doing a collaboration can increase both of your incomes and because there are two or more participants the expenses are split while the income doubles at the same time. We really are stronger and better together. Collaborations work best with influencers that have a similar target audience or niche market but not an exact overlap. You want to work with someone that you can complement and vice versa, not someone that has the exact purpose that you do. Strength lies in diversity.
Return on investment may have just been a formula before you read this blog post. You may have thought that to boost your ROI you would have needed to release new products, offer new services and stretch your time even more than you already do. Boosting ROI is all a numbers game. Getting creative with what you have now and where you are currently at can increase your return on investment. Take the time to review your business processes before 3rd quarter starts to ensure every sale in the later part of the years is of maximum profit.