How To Improve ROI With COVID-Proof Business Ideas?
ROI or return on
investment- every business analyzes its future by identifying past and
potential financial returns. ROI is a ratio of your company`s net profit compared
to your financial investment in the business.
What is ROI or Return on Investment?
Many people
often confuse this term with the profit margin. However, ROI is the financial
return that you receive from spending money and not the profit received from
the sale of goods and services. It helps the leaders to make informed decisions
by kicking the guesswork out of the window.
Why is it Important?
The ability to
calculate return on investment is crucial for every business, regardless of the
company`s size or industry. A businessman is considered smart if he manages his
expenses and monitor ROI regularly. Only businesses that can analyze ROI,
survive in the long run.
So how can you
improve your business`s ROI? How can you ensure that your business`s ROI is
always increasing, no matter what? Watch, which type of business model can
guarantee high ROI and
regular 6 figure income, here.
Here are three
ways that will help any business to receive higher ROI in every season:
1.
Choose a Business Plan with Zero Inventory Management
If you have a
small business that stores goods in a warehouse, then managing inventory is an
essential part of how you can control your stock. Inventory management is like
storing ice. Once you have kept ice inside the warehouse, it will meltdown to the
water and will drown your profits under it, if you do not manage your stock
smartly.
As the time of
the stock increases, its shelf-life, as well as the price, starts to decrease. For
instance, electronic devices and gadgets experience a price drop as soon as the
new model with upgraded technology is launched. From perishable to
non-perishable items, the value of stock starts decreasing if the goods stay in
the warehouse for a longer duration.
Hence, it is
best to order those goods that are popular and have numerous takers in the
market. You can also pick a business plan that does not require you to stock up
goods in a warehouse. E.g.- online
business courses. Online courses neither require you to spend heavily on
warehouse and inventory management nor go out of demand.
2.
Giving Discounts may
Decrease Profit
Most often than
not, many business owners purchase inventory from the distributors and lend it to
the market on credit. This technique only results in loss- loss of inventory
and loss of return. Why? The reason is that you purchase the stock after making
the payment in advance to the distributor. However, when you gave the stock on a
credit basis with receiving the down payment, you will be deprived of the
funds.
Hence, you will
have to offer your stock or products at a discount that will eventually hit
your profit margin. Always choose a business model where once you sell a
product, you get your money back. You can become a franchisee of Bada Business
to earn profits every week.
3.
Margin
Whether you have
a commodity business, retail store, mobile retailer, or have a restaurant
business, the profit margin is limited to 10%. However, the margin is not fixed
and may hit by external circumstances like an increase in cost, wastage of
inventory, expensive credit that can convert profit into a loss.
Thus, if you are
an entrepreneur who is looking to set up an independent business, always select
a business model that returns high ROI. For instance, a Bada Business Franchise
Partner enjoys 20% to 50% of profit margin, without experience undercutting
system, with fixed price.
If you are
looking for simple and effective ways to improve ROI on your business, you can
take our Problem Solving
courses that are designed to cater the modern-day entrepreneurs with
practical solutions to business challenges.
If you want to
become an entrepreneur, but have no business idea? Become our franchisee and
earn up to INR 25 Lac per month. For more details, visit: https://www.badabusiness.com/master-franchise
Comments
Post a Comment