Most entrepreneurs miscalculate ROI by ignoring hidden costs, especially their own labor. If you don't assign yourself a realistic salary, you're building a job, not a business. Peter Drucker said a business's purpose is creating life for stakeholders, not just acquiring customers.
3 sexy letters in your business are ROI. That's right, return on investment. And we're going to expose the big ROI lie today so that you don't fall into that trap and your business is more successful. I'm having a bad hair day. Yep, guys have bad hair days too. But that doesn't matter because I'm out and I'm doing my best to build the ROI of our business. But let's talk about that ROI lie that I was going to tell you about. You know, as you start to build your business, you're no doubt going to look at what, what things cost and what you're going to make on them and the return on the investment that you put forth. And so most people will intuitively understand that if something costs me 50 cents and I sell it for a dollar, then my return on investment was 50 cents. But that's really not the return on investment because there are other costs that you have to figure in. And as you're starting to build your business, you'll no doubt figure in the cost of advertising and marketing and your website and printing. And if you go to lunch with somebody to try to acquire a customer, or the cost of memberships in organizations like your Chamber of Commerce, all those things you'll start to figure out that are a part of your of your cost structure, of your overhead, of what it costs in order to deliver the product or service that you're delivering. But one thing that most every business owner doesn't catch until they've really started to mature as a business owner, or they probably know it and they probably catch it, but they don't do anything about it, is the cost of you. You see, if you don't have a plan to include the cost of you in your business, then here's what's going to happen. You're going to build yourself a really nice job. That's about it. And most of us didn't get into business in order to have a job. We got in business so that we could be free and have more life. Peter Drucker says the purpose of a business is to obtain and retain customers. And I think that's the biggest crock of horse hockey I've ever heard. The business of a business is to create more life for the people in it and for the people it serves. That's the real purpose of a business. And so if your business isn't bringing you more life, then there's something very, very wrong. But that's a topic for another day. Today we're talking about ROI, and you've got to, from the earliest point, include yourself in the cost structure of your product or service or delivering your product or service. Because if you don't, it'll be nearly impossible for you to scale. You'll never have the ability to extract out the cost of that and put it toward a new person to double your efforts, and then more people than that to triple and quadruple and multiply your efforts. So as you're building your business, think about what does it cost for you to be in the business as well. And you can't value yourself at your value. You have to value yourself at the task's value. So if, uh, if it's delivering, um, a a brochure or something like that, something that the mail could do, the value that you're really including at that point is negligible, and yet you've still got to include that cost. By the way, brochures should be left, not sent, but that's a topic also for another day. Just the idea though that everything you do has a cost involved, and what would it cost to replace you? What would it cost for you to have somebody else doing the work that you're doing? So that you could then grow and scale and develop a bigger business. Because I will tell you, the road to profitability, it's a long one. And yet, if you arrive there and you have no way to grow from beyond that, you're gonna find very, very quickly that you've built yourself a really, really nice job, but you can't get out of it. And there's no way you can sell it. There's no way that you can profit from the real profit of a business. And that is from scalability and from selling it to somebody else and developing a new one. So think about that. Think about the ROI lie. It's a lie if you're not including yourself in the cost of doing your business. Let me know what you think about this thought. Put your comments down below. If you like my content, if you like this video, please like it. If you like the content you're getting, please subscribe. We've got a lot more good information for you to help you on your way to developing a great business.
