Business Planning and What to Focus on – ROI vs ROT * Incedo Group

Business Planning and What to Focus on – ROI vs ROT

When it comes to business planning we often use return on investment or ROI to determine if we are allocating our money in the best way possible.

To arrive at your ROI, you take the profit you made and divide it by the total investment to determine how effective the use of your money really was. However, I actually believe that return on time or ROT serves as a better measurement.

Here are 3 reasons why I believe that focusing on return on time is more important than return on investment:

1. Time is the only truly limited resource.

If you stop and think about it, you can always make more money, whether it’s money made for the product or service you have now or for a new idea that’s waiting to come to life. Much in the same way, you can always hire new people, gain a new market, or find new contractors. The question is, can you make more time?

While you can argue that you can leverage your time, the reality is that time is limited. The more time you spend on something that isn’t fruitful, the more money you lose.

2. Human capital is the #1 resource.

No matter how large your organization or how many plans you develop, that’s not going to make you money. People make you money. People – from you to your employees to your contractors to your clients – are your number one resource to make money.

Going back to how time is limited, you need to make sure that you are focusing on the things that will leverage your human capital effectively. Things like employee training and the time you put forth in developing partnerships with contractors and clients are just some of the things to take into consideration.

3. It’s really all about time in the first place.

Think about it for a second – isn’t everything we do really all about how we spend our time? Most of the things we do are focused on allowing us to spend more of our time doing what we want to do in the first place. So if we make business decisions based on the return of time instead of the return of investment, you’re looking at the best way to determine if what you’re doing is really important and worth investing time into.

Ask yourself the question – am I maximizing my return on time by spending my time in the best way possible? Doing this will help you make better decisions, not only for your business and planning but also for your personal life.

We all want to have more time to do the things we want to do. And to do the things we need to do. Let’s start with determining how you spend your time now.