Business Terms Glossary
Return On Investment
Definition of Return On Investment
Return On Investment, or ROI, is the amount of profit (return) based on the amount of resources (funds) used to produce it.
If you invest $100 in an initiative, and it returns $110, the investment will be deemed to have had a positive ROI, 10% to be precise.
Note that the previous statement doesn't mention how long it took to earn that $10. For that reason, many financial gurus dismiss ROI calculations as simplistic because they don't properly account for the time value of money.
Return On Investment References On This Site
These Gaebler.com articles mention this glossary term:
- Pros and Cons of Advertising - Is it better to hire a new sales rep or place an advertisement in the local newspaper? You should always consider your ROI and your opportunity costs before you start an advertising...
- Investing in Patents - At some point, the investor needs to be reasonably assured that the patented concept is capable of yielding an acceptable return on investment...
- Employee Training - But in every business there is an invisible line between training programs that bring a return on investment, and those that are sapping time and resources that...
- Feedback Controls: Analyzing Strategic Decisions - Basing a reward system on return on investment figures encourages competition between business units. Cooperation rarely arises...
- A Company That Helps Entrepreneurs - This company I am referring to does not share a return on investment with the people donating the money to the firm...
- Wayne Huizenga - If you are good at critically analyzing what's wrong in a business and determine ways on how to institute corrections, then the return on investment will be much quicker...
- Capacity Planning - If you do purchase a new piece of equipment, there's a tendency to want to operate them at full-capacity to reduce the return on investment. This is a false way of thinking. You should...
- Obtaining Funding - Getting Venture Capital - This can be a very difficult task as many venture capitalists place more importance on return on investment than even the banks may. I believe this may...
- Interview with Psycademy Founder Dr. Lisa Turner - We make it possible for people to increase the return on investment in that asset. We enable people to raise their...
- ERP Modules - This try-before-you-buy approach can have a very big ROI for your organization...
- Defrauding the Government While It Resuscitates the Down Economy - This investment in stimulus plan integrity will have a very high ROI. A small investment in anti-fraud software and personnel...
- Attracting Angel Investors - Part 2 of 3 - In brief, an exit strategy must provide the Angel Investor with a 5-10 times return on investment within a 5-7 year time period. This article...
- Grant Writing Tips for Scientist Entrepreneurs - Whereas equity investors come with expectations of a return on investment and debt financing expects to be paid back in...
- Product Samples - The truth is, samples are indeed costly and the return on investment can be difficult to measure. Without samples, however, it...
- Brand Evaluation Metrics - This in turn, enables marketers to calculate the return on investment and life time value of the brand-which in...
- Family and Friend Investors - Your First Financiers - Give your lenders a maturity date for their invested money and ensure you pay back on time with a reasonable return on investment...
- Franchising My Company - In short, franchising increases the liquidity of the company and the return on investment...
- Founder of Collar Free Discusses Switch from Employee to Entrepreneur - Using this platform we manage design competitions for companies to engage with their fans and host innovative advertising campaigns with immediate and measurable ROI...
- Where to Focus Your Capital: Operations Versus Sales & Marketing - How does the return on investment look? How long will it take to break even...
- Steps for Building a Brand - Once you've designed your brand and documented what it stands for, there are a few simple things that need to be done to maximize your branding ROI...
- Why Small Businesses Should Support Healthcare Reform - It's when items come down in cost and we can afford them, knowing that the ROI is positive, that we invest...
- The New Marketing - Higher conversion of your marketing campaigns means that you are getting a better ROI for every dollar you spend allowing many companies to...
- Product Portfolio Strategies - Over time, the return on investment will level out as the growth rate decreases. When...
- Effective Executive Summaries - This is also the place to discuss the strategic benchmarks you hope to achieve in the near term (three to five years) as well as the return on investment you expect...
- L3C Business Structures - However, the catch has been that private investors won't participate unless they can achieve a return on investment � an impossible feat for a traditional nonprofit...
- Embracing New Technology - Calculate the return on investment for the new system and see if it would...
- Interview with Bazaarvoice Co-Founder Brant Barton - At Coremetrics, I led a team of web analytics experts, trainers, and support analysts responsible for driving customer success and ROI. My team generated hundreds of millions of dollars in...
- Franchising in China (Part 2 of 4) - According to the survey, the experts felt that the education industry did not require a high level of investment but offered the highest return on investment...
- Amenities to Help Lease Your Office Property - Even still, the return on investment can be great as you will be able to...
- Obtaining Funding From a Venture Capitalist - Venture capitalists look for a return on investment of at least 25 percent, and some expect to see anywhere from 50 to100 percent return on investment per year...
- Entrepreneurial Exit Strategies - Once they have realized the return on investment on their investment, they have free cash to explore...
- Email Marketing Software Cuts Down on Paper Consumption - These tools help non-experts build and manage professional-looking email campaigns, and even run a variety of reports that show the ROI on each. Most services allow you to send an...
- Investing in Patents - At some point, the investor needs to be reasonably assured that the patented concept is capable of yielding an acceptable return on investment...
- Product Portfolio Strategies - Over time, the return on investment will level out as the growth rate decreases. When...
- Obtaining Funding From a Venture Capitalist - Venture capitalists look for a return on investment of at least 25 percent, and some expect to see anywhere from 50 to100 percent return on investment per year...
- L3C Business Structures - However, the catch has been that private investors won't participate unless they can achieve a return on investment � an impossible feat for a traditional nonprofit...
- Product Samples - The truth is, samples are indeed costly and the return on investment can be difficult to measure. Without samples, however, it...
- Wayne Huizenga - If you are good at critically analyzing what's wrong in a business and determine ways on how to institute corrections, then the return on investment will be much quicker...
- Embracing New Technology - Calculate the return on investment for the new system and see if it would...
- Interview with Bazaarvoice Co-Founder Brant Barton - At Coremetrics, I led a team of web analytics experts, trainers, and support analysts responsible for driving customer success and ROI. My team generated hundreds of millions of dollars in...
- Franchising My Company - In short, franchising increases the liquidity of the company and the return on investment...
- Defrauding the Government While It Resuscitates the Down Economy - This investment in stimulus plan integrity will have a very high ROI. A small investment in anti-fraud software and personnel...
- Attracting Angel Investors - Part 2 of 3 - In brief, an exit strategy must provide the Angel Investor with a 5-10 times return on investment within a 5-7 year time period. This article...
- Steps for Building a Brand - Once you've designed your brand and documented what it stands for, there are a few simple things that need to be done to maximize your branding ROI...
- Amenities to Help Lease Your Office Property - Even still, the return on investment can be great as you will be able to...
- The New Marketing - Higher conversion of your marketing campaigns means that you are getting a better ROI for every dollar you spend allowing many companies to...
- Effective Executive Summaries - This is also the place to discuss the strategic benchmarks you hope to achieve in the near term (three to five years) as well as the return on investment you expect...
- A Company That Helps Entrepreneurs - This company I am referring to does not share a return on investment with the people donating the money to the firm...
- ERP Modules - This try-before-you-buy approach can have a very big ROI for your organization...
- Where to Focus Your Capital: Operations Versus Sales & Marketing - How does the return on investment look? How long will it take to break even...
- Email Marketing Software Cuts Down on Paper Consumption - These tools help non-experts build and manage professional-looking email campaigns, and even run a variety of reports that show the ROI on each. Most services allow you to send an...
- Feedback Controls: Analyzing Strategic Decisions - Basing a reward system on return on investment figures encourages competition between business units. Cooperation rarely arises...
- Entrepreneurial Exit Strategies - Once they have realized the return on investment on their investment, they have free cash to explore...
- Brand Evaluation Metrics - This in turn, enables marketers to calculate the return on investment and life time value of the brand-which in...
- Family and Friend Investors - Your First Financiers - Give your lenders a maturity date for their invested money and ensure you pay back on time with a reasonable return on investment...
- Interview with Psycademy Founder Dr. Lisa Turner - We make it possible for people to increase the return on investment in that asset. We enable people to raise their...
- Founder of Collar Free Discusses Switch from Employee to Entrepreneur - Using this platform we manage design competitions for companies to engage with their fans and host innovative advertising campaigns with immediate and measurable ROI...
- Franchising in China (Part 2 of 4) - According to the survey, the experts felt that the education industry did not require a high level of investment but offered the highest return on investment...
- Why Small Businesses Should Support Healthcare Reform - It's when items come down in cost and we can afford them, knowing that the ROI is positive, that we invest...
- Pros and Cons of Advertising - Is it better to hire a new sales rep or place an advertisement in the local newspaper? You should always consider your ROI and your opportunity costs before you start an advertising...
- Grant Writing Tips for Scientist Entrepreneurs - Whereas equity investors come with expectations of a return on investment and debt financing expects to be paid back in...
- Employee Training - But in every business there is an invisible line between training programs that bring a return on investment, and those that are sapping time and resources that...
- Capacity Planning - If you do purchase a new piece of equipment, there's a tendency to want to operate them at full-capacity to reduce the return on investment. This is a false way of thinking. You should...
- Obtaining Funding - Getting Venture Capital - This can be a very difficult task as many venture capitalists place more importance on return on investment than even the banks may. I believe this may...
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