There’s a lot that goes into running a business, and it’s important to know where your money is going. That’s where your ROI comes in. Knowing your ROI helps you make informed decisions about where to allocate your resources. It’s a critical metric for any business, and one that you should always keep an eye on.
What is ROI?
ROI is a business metric that stands for “return on investment.” It measures the profitability of an investment represented as a percentage of the original investment. To calculate ROI, you divide the value of the investment (in terms of return) by the original investment cost. For example, if you invest $100 in a stock and it goes up $10 in value, your ROI would be 10 percent. There are also many ways to track your marketing ROI, such as, Google Analytics to track grand awareness, you can use Facebook insights to track ROI with data instead of sales, and assessing ROI with your website traffic sources.
Well, you’re probably saying to yourself – “great does this really apply to my small business?! And if so, how do I begin??”
Even as a small business owner it is essentially to keep track of your ROI in all aspects of your business because it allows you to see how much profit or return you can expect from your investment. Knowing the ROI of any investment can help you make decisions that will generate better budgeting insights to increase profits, meeting customers relation goals, better planning and achieving long term goals for the your business, and even make better hiring decisions.
Though we have a good understanding of what ROI is and why it is important, Ciara Stockeland does a great job in her podcast breaking down why you should expect a return of your investment with everything in your business. Ciara states: “Whether it’s your inventory, your marketing, your staff, your educational investment, in this episode, we’re talking about why you should expect a return on investment on everything you put into your business.”
Not only does Ciara explain how to make a return on investment using her 4 steps of Expect it, Show up for it, Implement it right away, and Don’t be afraid to feel uncomfortable, but she also includes a free tool to use when approaching return on investment!
Check out Ciara’s podcast here:
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