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return on investment
Businesses everywhere are focusing on a simple 3-letter abbreviation: ROI, or return on investment. This is essentially calculated with the money you’ve invested into a business and the amount of return you got. For example, if you bought 50 shares in a company at $10 a share, that’s an investment of $500. Let’s say you make back $550, that’s roughly a 10% return on your investment.
To give you a harder example, thinking about spending $50,000 on an employee for a year. Now you have to calculate how much money that employee has made you. If that employee sells products and works independently then you could potentially have an easy calculation on your hands, but unfortunately, an employee usually doesn’t work on their own and is part of a team, contributing ideas, manpower and other things to help your business succeed. In a situation like this, it’s not easy to calculate how much return you get on your investment.
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The Secret to Increasing Your ROI
Repurposing is perhaps the best way to improve your ROI. Essentially, it means to continue using your investment past whatever projections you have. For instance, if you invested money into a marketing campaign that cost $10,000 but you have some leftover assets that could be used, such as sample products that weren’t used, logo and website design features that can still be used, then you can continue to utilise those extras and repurpose them.
For instance, your $10,000 could’ve been projected to give you a 50% ROI, meaning you made $15,000 back due to extra sales. However, you still haven’t used up all the sample products you have, meaning you can repurpose them in unique ways. For example, you could offer an affiliate marketing opportunity with bloggers. You send them left over samples, give them a link for their readers to buy from you and further increase your ROI. The blogger gets money, you get to reuse samples and continue making money from your investment, and everyone is happy.
Repurposing Software and Technology
Another great way of increasing your ROI is to repurpose technology and software. For instance, if you have an alert notification software setup for your business and employees, you can convert it to a global messaging service to keep your employees in check and give them notifications about various jobs or tasks that need to be done.
Another method of repurposing software is to just continue using an older version despite there being a newer edition. For example, you could buy an older version of Microsoft Office instead of subscribing to Office 365. You’ll save money in the long run, it probably has all the features you need, and you don’t need to spend extra money on features you won’t use. For hardware, you could probably continue using old computers as word processing machines or handling spreadsheets. You don’t need a powerful computer to run simple office tasks, so why upgrade and waste money? That $500 computer you bought for your office could probably last you an entire decade and still be powerful enough to repurpose as an office computer should you upgrade in the future.
Repurposing Employees
Hiring an employee is expensive. You have to consider the costs of interviewing the employee, equipping them with a new computer and other tools, and also consider benefits they receive. It’s not cheap hiring an employee, but you can get more value out of your staff if you know how to. You might be thinking about forcing them to do overtime or making them do multiple tasks that they weren’t initially hired for, but that would be a brutish way to go about maximising the efficiency of your staff.
A long-term solution for improving the investment you made in your employees is to give them a career and not just a job. If you want the most out of each member of staff, then it would be wise to give them a clear path to progress further in your business. Perhaps they can start as interns and slowly work their way up to become more important members of staff. Eventually they could become more specialised team members, or perhaps they take on a general role and help with other departments whenever the time is right. Having employees that grow and fill a variety of different roles is critical when you are growing your business, and it’s one of the best ways to improve your ROI on each individual employee you hire.
With the advance of social media and new forms of communication, it has become increasingly easy to expose other people to a wide variety of products and services. There are billions of users on social media sites such as Facebook, Twitter, Instagram, Snapchat, Pinterest, and more, and these users are all interconnected with one another in some way. This vast expanse in communication has allowed for new forms of marketing. Social media influencer marketing is one of the most popular new ways to market and advertise. Businesses and enterprises partner with social media celebrities (people well-known on social media for their social commentary, jokes, singing, dancing, or other talents) to promote their product or service. This partnership is mutually beneficial, as both sides are given the chance to build relationships and trust with each other and their fan base.
Despite the success that influencer marketing has had—notable examples being LeBron James for Nike, Kim Kardashian for T-Mobile, and more—there are still some misconceptions about it. People have their doubts, and, in this article, we hope to lay some of those to rest. Here are some of the biggest myths about influencer marketing, debunked:
A high ROI is all that matters.
ROI stands for “return on investment,” and ROI is what businesses may only think of when they consider whether or not to use influencer marketing. However, ROI is not the only thing that businesses should focus on. While it is certainly critical at the end of the day, and this type of marketing will get you a high ROI, it is not the only factor to succeeding with influencers. It is also about providing a quality product and building a relationship with the influencers you choose (and their audiences, by extension) that consists of mutual trust.
These influencers don’t really care about the product; they’re just in it for the money.
This misconception is held by some members of the public, but it couldn’t be further from the truth. Social media influencers don’t want to become known for advertising a product or service that is subpar. Their fans trust them, and they want to keep it that way. Influencers won’t advertise a product that would jeopardize that trust; i.e. a product that is terrible or would not do well with their fans. Their fan base is a major reason they are able to enjoy the celebrity they have, and no amount of money can make them sacrifice that.
Also, businesses and influencers build up a relationship. Forming relationships is one of the most important things to do in influencer marketing, and creating one between influencer and business is vital to the success of the campaign. This relationship goes deeper than money—it is based on mutual respect and trust.
It’s impossible to get in touch with celebs.
Influencer marketing platforms like NeoReach provide businesses with the ability to get in touch with social media influencers. It may seem, with influencers’ level of celebrity, as though they are difficult to contact, but that’s not true. These influencers rose to popularity because of their ability to communicate and their relatability. And they’re looking for you, too. Influencer marketing platforms like NeoReach have been developed to further assist with helping brands and relevant influencers find each other.
Influencer marketing is too risky because influencers can go rogue.
People are unpredictable. Influencers, like any other celebrity spokesperson, may say things that cause your company to cringe. But this doesn’t necessarily mean that your company will be harmed. You can always distance yourself from the influencer if need be, and, while the two of you work in tandem, there are safeguards against unpredictability and offensive commentary that can be agreed upon before the contract is signed and the representation begins. Also, if you pick an influencer you trust to remain in communication with you, you can ensure that they are reliable and consistent in helping your business — another reason why treating these partnerships as a mutual relationship is so important.
Any influencer will work; all they have to do is memorize some lines.
Different influencers promote different products. Building relationships and credibility is the fastest way to ensure that a business is successful in their ad campaign with the marketer. In order to build these relationships, the influencer has to take a genuine interest in the company itself, becoming invested in its success and seeing the product as personally important to them. While it’s true that anyone can “memorize some lines,” conveying enthusiasm and real interest in the product is something that only an authentically-dedicated influencer can do. And also, this authenticity (or lack thereof) is easily identifiable by fans.
People who don’t like the influencer will hurt the business that is partnering with him or her.
Every social media celebrity is going to have detractors and people who, for whatever reason, credible or not, dislike them. This dislike shouldn’t affect your business. Dealing with negative reviews to your business is separate from negative reviews of the social media influencer themselves. If you choose your influencer based on their reputation and relatability, you will be able to gauge whether or not they are likable. This likability will factor into your decision, and if you choose wisely and get to know them well, you can exercise a lot of control over how much of a concern this can really be for your business.
The relationship between business and celebrity is one-sided (or lopsided).
This is one of the most common misconceptions about influencer marketing. There is a stereotype that these relationships are one-sided, whether people believe that the business is taking advantage of the influencer or that the influencer is seeing more of an ROI than the company they are supposed to be advertising for. This is not true, and, once again, it comes down to the relationships that you build with one another. These relationships are critical, and without them, any ad campaign is doomed. By understanding what is expected of each party and what the ROI will be, the relationship is mutually beneficial.
These misconceptions about influencer marketing are harmful to businesses and enterprises. Hopefully, this article has helped debunk these myths to show that this type of marketing is beneficial not only for the influencer and the business, but for the public as well. Harnessing the power of social media in this day and age is vital to being successful.
The U.S. real estate market seems to have a relatively steady progress toward recovery in 2013.
During 2012 area residential and commercial property sales hit their highest level in five years for some regions throughout the country.
Coastal town real estate market boom tendency, the U.S. apartment shortage and the high rents, along with the Extension of the Mortgage Debt Forgiveness Act of 2007, low mortgage rates and the deduction for mortgage insurance premiums revived by the fiscal cliff deal, all of these facts seem to lead to a real estate market growing trend.
Under these circumstances, for real estate brokers it is important to have a good multiple listings service (MLS) for their websites. An interesting article on Internet Data Exchange (IDX) provider Boomtown ROI is published on Real Geeks blog.
According to real estate research firm Reis Inc., low apartment vacancies and high rents may encourage more renters to become home buyers.
There have been three years of vacancy declines and in the last three months of 2012 the national apartment vacancy rate dropped to 4.5 percent. That was the lowest vacancy rate since the third quarter of 2001, according to Reis data. Also, the average effective rent of $1,048 was up 0.6 percent from the prior period, and marked the twelfth straight quarter of rising rent.
“You’re starting to see the initial signs of rent versus own calculus that takes place. You’re starting to see it in New York and San Francisco, where people are paying $3,000, $4,000, $5,000, a month to rent. They look at it and say, ‘All right, I’m already dealing with 8 percent, 10 percent rent increases from year to year, how much longer do I really want to put up with this from landlords?” said Ryan Severino, senior economist at Reis.
Home values in Metro Detroit, while rising, remain low compared to the rest of the nation, and are also still below pre-recession levels.
“Southeast Michigan’s real estate market is making great strides. Without question, we are on the road to recovery,” Jeanette Schneider, vice president of RE/MAX of Southeastern Michigan, said in a press release.
Coastal town real estate market has a boom tendency.
Home prices are on the upswing, according to the S&P/Case-Shiller index. Home prices rose 4.3% in October 2012 in comparison to October 2011. While some states are still struggling, others are making huge progress. Massachusetts home sales have increased 38% from November 2011 to November 2012, while home prices also increased 2%. The number of home sales in the month of November throughout the state was at a level that has not been seen since 2005.
In Louisiana, both residential and commercial property sales reached their highest level in five years during 2012. The outlook for 2013 looks very promising in Terrebonne and Lafourche parishes, according to Bill Boyd, Bayou Board of Realtors president. Data for existing and new properties in Terrebonne, Lafourche and St. Mary parishes, plus part of Assumption Parish, shows sales of $343.8 million for 2,086 units in 2012, compared to $313.3 million for 1,934 units in 2008 when the national recession started.
In Florida and California, beach homes are quickly leaving the market as investor demand is rising, which is turning the “buyer’s market” into more of a “seller’s market.”
How to calculate real estate return on investment (ROI)
To determine a property is a good investment, you need to calculate the real estate return on investment (ROI). Before you begin, gather all relevant information, such as tenant payments, any property costs such as taxes and insurance fees and the original amount of your investment.
1 Calculate how much you would earn from the real estate. Let’s say you make $1,000 per month on one property. Multiply by 12 to get the yearly total. This means $12,000 per year.
2 Add up your expenses for the real estate. Include taxes, insurance, mortgage payments and repairs and any other expenses pertaining to the property. Let’s say you pay $1,500 a year for taxes, $1,500 a year for insurance, $500 a month ($6,000 a year) for mortgage payments and $500 a year for repairs. That would be a total of $9,500 a year for expenses.
3 Calculate the investments. Down payment and costs of repairs made before renting or leasing the property are considered investments. Let’s say you put $20,000 down on the real estate and made $5,000 in initial repairs then your total investment is $25,000.
4 Calculate the net operating income. Your net operating income (NOI) can be found by subtracting the total expenses from the total amount that you would earn from renting or leasing the real estate. Using the examples above, if your yearly earnings were $12,000, your NOI would be $12,000 – $9,500 = $2,500.
5 Use the NOI to get the ROI. Divide the NOI by your total investment amount. The number that you will get will need to be converted to a percentage by moving the decimal point two places to the right. Using the examples above, $2,500/$25,000 = 0.10, which would be 10 percent for the ROI.
