Return on investment (ROI)
February 23, 2011 at 11:31 am 1 comment
Shawn and I, and many members of our family, are addicted to American Pickers (History Channel). But one of the biggest problems I have with it is how they value things. They say “I paid this much money for this ($50), and this is what I can get for it ($100), so they say profit equals that ($50)”. Where is the return on their investment? The gas spent to make their way to their pick, the cost of the van, the cost on maintenance of the van, staff, and most importantly, the cost of their own time?
Sometimes we, as business people, devalue ourselves and forget that our time has value. You have to remember that ROI has to include you and your time, not just the time for you to do the job, but the time it takes to do the estimate, the back end stuff that takes your time, answer the phone calls, making up the contracts – sometimes that takes hours but if you don’t bill for that time, how can you claim a profit?
It shouldn’t matter if you have other jobs to fill those billable hours to fill that time, even in this economy, if you devalue yourself and your time and give your time away, others will devalue you too. Once you know your value, find clients willing to pay it. Those that aren’t willing to pay your worth, aren’t worthy of you.
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Dori Thompson | February 23, 2011 at 2:58 pm
That is EXACTLY what I deal with every day. Looking at hidden costs in a marketing program, and knowing how to calculate REAL ROI. For myself, I pay very close attention to time vs: $$, and identifying loss leaders in my business (which includes personalities that cannot be managed easily, and will eventually end up sucking my time in hand-holding, unpaid). That does not work. We must look closely at that….. good article, Brenda. It resonated.
Dori Thompson