Spend Money to Make Profit – ROI Classroom

Spend Money to Make Profit – ROI Classroom

Posted · 9 Comments

In this blog post and video I am going to tell (and show) you why it is so important to understand the basic rules of ‘Return on Investment’ and why if you don’t you may be costing yourself and your business HUGE profit opportunity and potentially force your online business to close before its time.

Every business needs to make buying decisions.

While you may feel like you’re lifetimes and eons away from the Zuckerberg’s, the Jobs’, the Gates’ and the Branson’s of the world, there isn’t much of a difference between the way you need to be making your buying decisions and the way they do.

However in the online business world, I’m beginning to see a trend where women scramble for success while holding every penny they have as closely to their chests as possible in the hope they don’t lose everything and fall into the red. 

Many of us seem to operate in a scarcity environment where, if given an option of spending $100 for a premium solution and $0 for a no-frills no features solution, we choose the no frills option every time because we believe that it’s saving us money and therefore saving our business from failing.

This is a specific outcome of not understanding the concept of Return On Investment. 

The power of the internet and advances in technology mean there are more women than ever before stepping online to build a business, but most of them don’t actually know fundamental business concepts or processes.  I meet women who are working their arses off and stressing themselves to breaking point feeling scared, anxious and small while others with a stronger business brain streak ahead.

In the end the success of an online business rarely comes down to the product sold and more down to whether or not the business owner sees the value in investing in tools and processes which will give them the best financial return for their buck.

The women who don’t understand what return on investment means in relation to buying decisions in their business sees every penny spent as COST and those that do understand Return On Investment sees money spent as an INVESTMENT.

The two businesses that come out of these two mindsets are vastly different. 

Where do you think Facebook would be today if Zuckerberg didn’t spend money to create systems and processes that would make him more money in return that what he spent?

Who is more successful?

The person working in the scarcity environment viewing all spend as as cost? 

The person who understands the value of what they spend on and seeing it as an investment? 

I invite you to watch my video below (it’s only a couple of minutes) where I show you a mapped-out example of the difference in revenue that can be achieved by someone who understands their ROI vs. someone who doesn’t, using a simple Premium Plugin example. 

Have you ever connected to ROI before and where are you playing today?

I loved making this video and this post for you and I hope you got value out of it. If you liked it I would love it if you would share it with your friends and colleagues. 

Spend Money to Make Profit – ROI Classroom was last modified: May 21st, 2015 by Alice Nicholls

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9 Responses to "Spend Money to Make Profit – ROI Classroom"
  1. Joanna says:

    AWESOME! Thanks Alice.

    “This may be a rhetorical question”! Love it.

    • Alice Nicholls says:

      Haha! Thanks so much Joanna. I am so glad that you’re here. Looking forward to sharing more rhetorical q’s with you.

  2. Tanya says:

    So good, I just spent $500 today on getting my web designer to add a shop to my website… Definitely made me uncomfortable as I am yet to start a database etc yet, but I know exactly what I want to do with it, so just decided to rip off the band aid!

    • Alice Nicholls says:

      Hey there Tanya. Yes, spending money to make sure your eCommerce platform is in good shape is something that can absolutely help you with your return on investment. Now I would focus on the work that you do to send traffic to your store. Because ROI encompasses TIME also I recommend you sit down and form a strategy across channels such as social, website and advertising to send that traffic to your site’s shop. Have you got a product or service to sell in there now?

  3. leah says:

    Alice, thank you so much for this. I have never understood ROI. Your layman terminology had me nodding in agreement all the way through!

    • Alice says:

      Hi there. Thanks so much for this feedback. There are so many different avenues to be thinking about when it comes to ROI but this one is pretty simple. I’m really glad that you’re here! 🙂

  4. Georgia says:

    OH MY GOSH This is SO awesome! Thanks Alice!
    Yes, maybe a rhetorical question but when its all explained so beautifully simply its easy to see and also gets me excited for my biz! look forward to more of these. 🙂
    G x

  5. Nicole says:

    you ain’t no dill Al I don’t know anyone these days excelling in maths xx

  6. Adelle says:

    Thanks Alice, looking forward to more classes!

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