Calculate Return on Investment for Your Business with Precision. Make Data-Driven Decisions for Maximum Profitability.
Real-time calculation based on your inputs
Based on your inputs, this investment shows strong potential with a 50% ROI. The payback period of 9.6 months is reasonable for a medium-risk investment.
Where:
Example Calculation: If you invest $10,000 and generate $15,000 in returns:
ROI = [($15,000 - $10,000) ÷ $10,000] × 100% = 50%
For investments spanning multiple years, use the annualized ROI formula:
Where n = number of years
Modern ROI calculations for small businesses should include:
Based on current market trends projected to 2026:
Investment: $2,500 for social media ads and content creation
Returns: $10,500 in new sales over 3 months
Key Insight: Targeted Facebook ads yielded highest conversion rates at 4.2%
Investment: $15,000 for new commercial oven
Returns: Additional $6,750 annual profit from increased capacity
Key Insight: Payback period of 26 months with energy savings of 15%
Investment: $4,000 for sales training workshop
Returns: $14,000 increased sales in following quarter
Key Insight: Trained employees had 38% higher close rates
ROI (Return on Investment) measures the profitability of an investment relative to its cost. For small businesses with limited resources, ROI is crucial for:
A positive ROI indicates profit, while negative ROI shows a loss. Small businesses should aim for ROI above their cost of capital (typically 15-25%).
A "good" ROI varies by industry, risk, and business stage:
Consider your industry benchmarks and risk tolerance. Higher-risk investments should yield higher ROI potential.
Annualized ROI converts multi-year returns to an equivalent annual rate:
Example: A 3-year investment with 95% total ROI:
Annualized ROI = [(1 + 0.95)1/3 - 1] × 100% = 25% per year
This allows comparison between investments of different durations.
Include all direct and indirect costs:
For marketing ROI, include: ad spend, agency fees, content creation, software costs, and employee time.
Strategies to improve ROI:
ROI (Return on Investment): Measures net profit relative to total investment cost.
ROAS (Return on Ad Spend): Measures revenue generated per advertising dollar spent.
Key Difference: ROAS doesn't account for costs beyond ad spend or profit margins. A 5:1 ROAS ($5 revenue per $1 ad spend) might yield negative ROI if product costs are high.
Frequency depends on the investment type:
Regular tracking helps identify trends and make timely adjustments. Use our calculator to establish baseline ROI and track changes over time.