For months, I focused on Facebook marketing, only to realize one day that this activity destroyed my time without generating any value for my Finxter.com users and myself.
I developed the habit of calculating the ROI for one activity every day. The result of this simple activity blew my mind and changed the whole game for my online business. I stopped doing Facebook, answering emails quickly, posting on Instagram, or even creating Thumbnails for my YouTube videos. These activities had a negative ROI based on my calculations.
How to Calculate the Return on Invested Time of Daily Activities as a Small Business Owner?
Calculating the return on invested time for daily activities as a small business owner can help you identify the most productive use of your time and prioritize your activities accordingly.
Here are some steps to help you calculate the return on invested time:
- Identify your daily activities: Make a list of all the activities you perform in a day as a small business owner. This could include tasks such as checking emails, making sales calls, updating social media accounts, attending meetings, etc.
- Assign a time value to each activity: Estimate the amount of time you spend on each activity in a day. For example, if you spend 2 hours checking emails, assign a time value of 2 hours to that activity.
- Assign a monetary value to each activity: Determine the monetary value of each activity. For example, if you make 10 sales calls in a day and each call generates $100 in revenue, assign a monetary value of $1,000 to that activity.
- Calculate the return on invested time: To calculate the return on invested time, divide the monetary value of the activity by the time value of the activity. For example, if you spend 2 hours checking emails and that activity generates $50 in revenue, the return on invested time would be $25 per hour.
- Analyze the results: Review your list and prioritize your daily activities based on their return on invested time. Focus on the activities that generate the highest return on invested time and look for ways to delegate or automate the activities that generate a low return on invested time.
By calculating the return on invested time for your daily activities, you can make better decisions about how to allocate your time and resources as a small business owner.
Insights For My Own Business
Instead, those activities usually have a very high ROI (at least in my business):
- Improving your product: it will reduce the return rate, increase sales and word-of-mouth marketing, increase customer satisfaction, repeat buying, and boosts your sales performance because you start believing in your products again.
- Email marketing: The ROI of email marketing is still much higher than for any other marketing activity in the online world.
- Tweaking your funnel and conversion rates: A small percentage improvement of your click-through rate and sales page conversion will add up to a regular increase in your product sales—month after month.
- Listening to your customers: This one is huge. They often tell you exactly what you should implement. Just listen, and you’ll automatically end up doing high ROI activities.
There are many more insights. Develop the habit of analyzing what you are spending time on every day, and you will quickly realize that there are plenty of low-value tasks which you can replace with high-value tasks to ultimately increase your output. This is also true for non-business owners.
Action Steps: What are those high-value activities for you? If you don’t know, you should figure this out immediately. It’s much more important than anything else, so prioritize it.
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