“Return on Investment”

One key to surviving in business is to make sure the money you put into it is producing (or going to produce) a larger amount of money. There are a lot of ways to measure this—one simple one is known as “Return on Investment” (ROI for short). The calculation is simple: “Net Return” divided by “Cost of Investment.”

From this perspective, it’s easy to make an assumption that every business lead or opportunity is valuable. Money is fungible—a dollar is a dollar—so extending this logic, the most valuable business opportunity is the one that brings in the most dollars.

In reality, a business has its own goals and time horizons, which is how it filters opportunities. 

An opportunity that has a low—or even negative ROI—can be worth it if the people managing the business believe that it will lead to a much more valuable opportunity. 

On the flip side, an opportunity that seems to have a high ROI upfront could end up costing a lot of additional investment, which turns the ROI negative.

This filtering, planning, and execution takes time and energy. Manufacturing a product, delivering a service, also takes energy.

If you are helping a business generate leads, but they’re the wrong kind of leads—outdated, unprofitable, or doesn’t see value in the business—then you are not delivering a positive ROI. 

If you want to keep working with the business, you need to make sure you’re helping them move in the direction that is best suited for their interests, not just your own.

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