One of the most widely recognized business measurements is “ROI” aka “Return on Investment.” As defined by Forbes media company Investopedia “A performance measure used to evaluate the efficiency of an investment.”
When you consider your career and your social life you can use the “Return On” formula to measure your success, progress, and results for any aspect of your life.
Exercise for ROI
Write down a list of terms beginning with Return On__. Start and go through the alphabet in order creating a Return On__ for each letter. Imagine each word you use as a measurement for performance in your business or social life.
The gurus at valuebasedmanagement.net assert that “Net Income” our value for Net Results “is an unreliable corporate performance measuerment, the outcome of the formula for ROI must also be unreliable to determine success or corporate value.”
Although this is true we can still apply ROI measurement to our business and social lives if we determine the value of our personal “Net Results” the corporate world’s measurement for Net Income.
5 Factors That Determine The Degree To Which “Economic Value” aka our personal “Net Results” May Be Overstated by valuebasedmanagement.net
1. Length of project “life” Ex: Realtor’s time spent at open houses
2. Capitalization Policy Ex: Amount of time it takes to write a blog article
3. Rate at which Depreciation is taken Ex: Stale print ad messages as main lead generation tool
4. Time between investment outlays and recoupment of these outlays from incoming cash flow Ex: Time spent blogging before lead generation begins
5. Growth rate of new investment Ex:Time to launch and write a blog vs marketing exposure