Growing Your Business ROI

Person holding an electronic tablet to monitor ROI

Owners invest a lot of time, effort, and money into building their businesses. But, not all investments result in a valuable return.

The classic definition of return on investment (ROI) is the ratio between profitability and the cost of investment. It’s an indicator of efficiency and effectiveness for an organization’s investment, i.e., if you get a high return on investment, your plan is working in your favor.

A return on investment is generally measured in terms of the following:

  • Increased profits
  • Reduced expenses (overhead or production costs)
  • Operational efficiency
  • Higher sales

However, it is important to remember that ROI doesn’t always equate to dollars in the bank but should provide some identifiable benefit. Re-evaluating your expectations can help you spot intangible benefits to pursue that will eventually help increase your profits. For example, throwing a thank-you party for clients at the end of the year won’t increase your sales, but it might increase customer loyalty and help retain them.

This type of return on investment for things such as building Customer Satisfaction and Brand Awareness is as important as reducing expenses and operational efficiency but is much more difficult to quantify.

To achieve customer satisfaction, you need to invest in your company’s talent. Each hiring decision your business makes is a change in trajectory, for better or worse. The best investments businesses can make are those that ensure that they can both attract and retain the best person for every position. This means investing time to interview candidates thoroughly to find the best possible hire, investing in resources to help train and develop your talent, or investing financial resources to craft an improved compensation and benefits package.

Giving bonuses or increasing employee benefits will have an immediate draw on the bank account. Still, it might make it easier to recruit better workers, improve morale, increase productivity, and help you keep valuable staff members.

This detailed HR hiring guide for 2023 can lead you through some of the legal obstacles and pitfalls of hiring a new employee.

Creating brand awareness is more difficult and requires a three-pronged approach and an investment in Product Development, Search Engine Optimization, and Online Marketing.

To help your business grow, setting aside a portion of your capital for Product Development is important. Investing in product improvement and enhancement will increase revenue and profit. The key is knowing your customer’s needs and pain points and finding a way to address them. You can start by looking at your company’s top-selling products and expand on those offerings. It may require a high initial investment and some brainstorming, but the return on this investment will be worth it.

Small businesses should also invest in marketing assets, such as website Search Engine Optimization (SEO), that continue producing revenue over the long term. While Google AdWords or Facebook Ads are effective choices for marketing, they’re limited in potential, as a decrease in advertising means a reduction in leads for your business. By contrast, investing in SEO has a return on your investment that goes beyond the dollars you pump in. The ROI for each dollar invested in SEO is about $2.75 on average. Your site can still rank high for your keywords, and you’ll still get organic SEO leads for months or years after any reduction in spending.

And then there is online marketing. Effective online marketing requires knowing your target market and crafting a digital presence that promotes your company. Whether that presence is heavy with digital advertising, social media, email marketing, or a combination of factors, this investment will go a long way. Digital marketing allows a more extensive reach as most of your target audience is online.

According to the survey, most marketing professionals (84%) are pressured to prove a tangible ROI to justify their marketing spend or budget increases for campaigns and initiatives. However, most struggle to develop a matrix. The survey found that 61% of marketing leaders do not use ROI when making strategic decisions because they aren’t confident in their data. The solution is to track the new customers you gained, the increased traffic to your website, and the increased awareness of your business brand in the marketplace. One sure tool is to survey new customers as to how they heard about your business.

Gary Vaynerchuk, Serial Entrepreneur, Chairman of VaynerX, CEO of VaynerMedia said, “When I hear people debate the ROI of social media? It makes me remember why so many businesses fail. Most businesses are not playing the marathon. They’re playing the sprint. They’re not worried about lifetime value and retention. They’re worried about short-term goals.”

Whatever your process for creating and measuring ROI, the bottom line is to build long-term growth.

However, you also need cash on hand to pay for the necessary things to create growth. At Business Finance Corporation (BFC), we specialize in helping businesses convert earned money that is receivable into ready cash. To learn more about how BFC can help you, visit or call 702-947-3800.

Your Partner in Success,

David Cabral