Defined as the ratio between net profit and cost of investment of some resources.
Return on investment, or ROI, is used to evaluate the efficiency of an investment and also to make a comparison of the efficiencies of different investments. The calculation is both straight-forward as well as versatile, and can be applied to many settings. Most often in the financial world, we might look at the ROI of our favorite stock holding (which is undoubtedly APPL or AMZN at the current time, right?). Say you bought AAPL at $100/share in July 2016 and about two years later it’s worth$222/share.
ROI = (Gain from investment - Cost of investment) / Cost of investment
ROI APPL = ($222 - $100) / $100 = 122% …Not bad!
In the above example, the resource we invested was capital. However, one could argue that time is our most valuable resource. This morning I attended a great event hosted by Roswell NEXT, a local community organization which I am a part of. There, I had a conversation with someone about ROI.
It seems natural that with our finite amount of time in each day, we look to join organizations, attend certain events, or talk to certain people based upon our perceived (or desired) ROI on that time spent. It makes good business sense, and hopefully you will be able to measure that by way of landing a new account or signing a new contract.
But have you ever considered the importance of being involved with or doing something simply because of your interest in it? Volunteering with an non-profit you are passionate about; joining a local community organization; introducing yourself to the new neighbors who just moved in; or trying a new sport or activity.
Time is our most valuable resource. Time spent on personal pursuits should be considered independently of professional networking and business development, but they should hold equal weight. There’s an ROI to those personal pursuits, though it may not be as efficiently measured.