All wealthy business entrepreneurs understand that the difference between being an entrepreneur and becoming an industry leader is in selecting feasible ideas. The objective is to concentrate on the ideas and initiatives that will provide you with the most return for the time, money, and effort you put into them - therefore selecting high Return on Investment (ROI) projects. Successful people understand the difference between a "cool" concept and a profitable idea. How many times have you thought to yourself, "This is a great idea!" yet nothing came of it? Here are some typical scenarios that many enthusiastic entrepreneurs face:
* "I've invested hundreds and thousands of dollars on a product or service that I thought was a great idea, but no one purchased it."
* "I was brainstorming with a friend, and we both loved this idea of working together to create a seminar - but we never made it happen."
* "I have a big dream of starting a school for (fill in the blank), but it's funny, I never have time to work on it."
* "I know I need to implement a sales follow-up system and make prospecting calls - but I always get busy with other things."
* "I can work in my business all day long, providing the customer with an excellent product or service, but I hate marketing and sales so I just never get around to those aspects of the business."
Here is the bottom line: what you focus on grows. If you focus on tasks that do not provide a large financial or emotional return on investment, you are not running a business. Period.
This concept is more than just financial profit. Even if a concept does not generate a monetary return, it may nevertheless be viable. R.O.I. can also be calculated based on the amount of time you save by implementing processes in your business, allowing you to spend more time on your business and less time in it.
Your return can also be assessed in terms of credibility and status in your sector, which will open up more prospects. Your return on investment may be money saved by decreasing faults in your systems. Your return on investment may be an emotional sense of accomplishment or completion. A truly feasible proposal considers all of these potential returns. So, how do you evaluate your ROI?
Five Questions to Evaluate ROI.
1. Will your idea help you get closer to your larger goal of success?
There are only two types of business activities: those that help you get closer to your vision and those that do not. How will you achieve your goals if you spend a large amount of time on chores that do not take you closer to them?
2. What are the prospective revenue streams?
What costs will you incur? What will you charge? How much volume do you need to sell to recoup your costs? When did you break even? When did you make a solid profit?
3. Will it minimize errors or costs in the business?
Is this proposal going to help you improve your process and minimize errors or costs? What influence will it have on your company's total bottom line?
4. Will it boost your availability?
Will this allow you extra time in the end? Or will it take longer than it's worth? It is not uncommon for seemingly decent ideas to evolve into greedy time thieves who steal your time and money. Remember that 20% of your time input should provide 80% of the returns.
5. Will it improve your reputation and credibility?
Is this proposal going to position you and your firm as industry leaders, boost your credibility, and encourage potential customers to do business with you?
So, now what?
Once you've determined your ROI criterion, generate a list of your top five suggestions. Then, compare each idea to the 5 R.O.I.
The questions listed above. Rank each idea according to the following scale:
1 = Definitely No;
You have to wait 25 seconds.
2 = Not Really, 3 = Neutral, 4 = somewhat, and 5 = absolutely.
Finally, add the scores. The concept that receives the highest score wins. This is an idea with enough traction to overcome the "cool factor" and truly align you with your objectives. Now get started! Don't forget to create a plan and schedule time to work on it.