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Small Business Investing

Rois and Small Businesses

How else do businesses use ROI in their decision-making process?

ROI enables the business to see what capital investment option might generate more returns for the business. In this way, businesses may make relatively safer, more profitable decisions. For example, a company may use ROI to analyze whether the company should hire sales people, with all of the inherent costs, or use an outside firm to generate sales, but give up a certain percentage of the income to cover the outsourcing expense. By accurately projecting or budgeting the expenses related to a direct sales activity, as compared with an outsourced sales activity, the company may make a proper financial-based decision.



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