How To Get A Profitable Return On Investment?

Getting a good return of investment (ROI) is all about doing sufficient research and planning.

Now, how much do you agree with this?

By default, most business owners who put money into their company would eye for a healthy return on investment. After all, no one is willing to do a business that doesn't generate them revenue.

ROI is important

No matter what industry you are in, return of investment is crucial. Even for me as a writer, I make it a point to publish blog posts that are valuable not only for my readers but to myself as they will generate indirect leads for me to expand the business.

But there's something you should know.

Every business situation is different and the mindset that you have will ultimately determine your success or failure in the financial investments you do.

If you’re planning on putting some serious money into your business and you want a return on investment, here are some strategies you may want to consider.

1. Never Gamble With Your Money

Never Gamble With Money

Life is a gamble but money ... you got to be really wise in using it.

Having multiple second thoughts such as "can I afford this investment" can easily save you money (from going the wrong way).

According to Darren Bonawitz, co-founder and CEO of Sherpa Fiber (Kansas), he recommends you to avoid investing money that you are not prepared to lose.

When you’re mulling over whether to make a big investment, playing devil’s advocate may help you with your ROI analysis. Bonawitz suggests spending twice as much time coming up with all the reasons things may not work out as you spend determining why things will work out.

And this makes all the sense.

If you look back last three years during the Bitcoin boom, I was one of the first early adopters in Malaysia. I invested close to RM 8,000 in Bitcoins and made over RM 16,000 in just three months. Sure, the risk was there but it was something I was willing to lose.

Important tips to get high return of investment: Invest only if you are willing to lose the money as there is absolutely no such thing as safe investment.

2. Invest In Something That Has Staying Power

Staying Power for Return Of Investment

Not all investment are equal and some investments are only profitable for a short time period.

Let me give you an example.

If you put all of your money into a lot of advertising that will run for a day or two, you could get sales that do give you a good return on investment. But you might also get absolutely nothing from it.

Advertising is like gambling. There are always chance for not getting anything from it. And through my consultancy career, I know a lot of entrepreneurs and business owners who blame the economy, the strategy or even their products when something failed to lift off the way they want it to be.

There are a lot of things that we cannot control, and this is one of it.

According to Felix Hartman, the CEO of crowdfunding site FundThis, his words are "To me the best investments are those that are permanent.” For instance, Hartmann says that he made a $5,000 investment in his research and development that ended up increasing his checkout rates by 300 percent.

“These benefits are permanent, while ads are short-term sales,” he says. “The key is to strike a sustainable balance between the two.”

While you’re trying to find that balance, this next step can help(if you are dead serious in increasing your return of investment.

3. Research And Weigh The Risk Of Your Investments

Research For Better Return Of Investment

Do you know that researching the risk of an investment can help increase the likelihood of a return on that investment?

Yes. You read that right.

At times, somethings just look so good. An idea, a property, a strategy, a product etc. They look good and you are confident that you had found a unicorn in the highly competitive world.

Here's a great quote from Jason Parks, owner of The Media Captain, a digital marketing agency based in Columbus, Ohio.

“If I bring on a new hire or invest in technology for my marketing agency, I want to make sure I can pay the bills right off the bat,” says Jason. “I don’t get romantic thinking about the potential [I might see] a year or two years down the road, a mistake a lot of business owners make.”

The next time you had a thought like "I will be able to pay off my investment and make a profit after three months", you should skip the idea completely.

Make sure you are affordable for the investment because if you are not, you are not going to make enough to see a nice profit margin. Period.

4. Crunch The Numbers To See The Possible Return On Investment

Numbers Game In Return Of Investment

Have an idea about investment? Good ... but don't proceed yet.

What you should be doing next is to get down to the numbers. You probably heard about this, "it is not a numbers game."

But the truth is, it is always a numbers game!

If you want a solid return on investment, this can be one of the most important things you can do.

Performing ROI analysis is going to help you determine the effectiveness of your investment, as well as the chance to score some serious profits from the investment.

ROI analysis is tedious work—but it is beyond critical for you especially when you are serious in making a profitable home run from your investment.

5. Remember To Invest In The Person Running The Business

Self Development For Return Of Investment

As a success coach, I can't fail to highlight this anymore. The success of you is determined by your colleagues, team members and associates.

And it is beyond paramount to ensure that you are constantly investing in the person running the business.

Not only that you have to invest in your team, you have to invest in yourself!

“The best investment is always an investment in yourself. Whether that be in your education—business books, seminars or conferences—or physical and emotional health, the highest return you’ll ever see on your money is when you invest in yourself,” says Doug Sands, founder of Restaurant Clients Magnet, a social media marketing firm in Iowa City, Iowa.

Some of the quick ways to invest in yourself (and get a good return of investment) are:

  • Book reading
  • Attending networking events
  • Going for courses for personal improvements
  • Face your challenges and learn from your mistakes
  • Allocate time for self meditation and time off from work

You’ve made your business what it is today, but if you feel like there’s room for improvement, perhaps you’re holding it back.

There is always room for improvement that every entrepreneur can improve on something,.

And don't make the idea run away because whatever you improve might be the jet fuel your company needs.

If you want a strong return on investment on your business, but you’re not sure where to start, the best place to look may be in the mirror.