What should be a good ROI for a startup?

merchantofzeny

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I haven't considered it'll take more than 6 years to get a ROI. I guess best way to go about this is find out the standard ROI for whatever business you are planning to build. Your goal will next be then to survive that long. If you can breakeven earlier then that's just a bonus.

Quote from: justdimin on April 29, 2022, 09:34:10 AM

For example, I earn a decent amount right now, if I quit this job and start my own business, and it doesn't earn, then not only I do not have a good business, but also I can't pay my bills and eat food, what am I suppose to pay that with. This is why I believe that even though it shouldn't be something huge, it needs to earn at least enough to pay the bills.

I don't think this is a good way to go about building a business. It should be separate from your own expenses and you must be willing to NOT take a paycheck from your own business during its infancy to be able to reinvest that money back into it. So if you are quitting your job, you wouldn't be relying on the cashflow from the business for your needs, you must have a separate savings to sustain you until the business takes off and can afford to finally pay you a wage - which could be lower than your current paycheck.

Mometaskers

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This would really depend on what industry you are entering. I remember for a time when food trucks were the rage I remember hearing from TV that it takes 1-2 years to get ROI, which I thought wasn't shabby - assuming your business last that long.

LogitechMouse

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Quote from: Rohan Kotkar on April 21, 2022, 09:21:16 AM

According to you, what should be the ROI for newly launched startups?

I think instead of thinking of an ROI if you are a newbie, think of a way to survive. Doing research always, find the trend, your location, the target of your business that you are building etc. etc.
What I mean when I said survive is that how will you survive in the succeeding years to come. What will you do if something bad happen to your business?
This pandemic really affects the business sector especially the small and the medium ones that they need to stop it because they are losing money. Its a good thing that some are going back again to their usual business and recovering from their past losses. There will and always be negative events and things in business always so better to think of ways to surpass them instead of thinking too much of the ROI. I'm not saying that don't return your investment but don't focus on it.

Quote from: Rohan Kotkar on April 21, 2022, 09:21:16 AM

My views are around 15% per annum but it would take around 6.6 years to earn the initial amount back. Would it be a bad decision?

No it isn't a bad decision at all. Most of the business especially the small ones doesn't last long and if you're business will last for 6.6 years then it will be a successful one. Successful companies right now took years in order for them to be successful. I just remember Alibaba of Jack Ma where it took 14 years before they will become successful.

justdimin

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Quote from: Flexystar on April 25, 2022, 12:13:28 PM

Business is something which should be taken as long term investment and artwork of patience! It’s built stone by stone and you have to have considerable amount of hardship with it. I don’t think math should be put forth immediately. First you need to set up base for it, have recipe ready for your business which includes smart to hard work, management, plan executions and much more. Once you have product or service ready and available in the market then you should start with the ROI maths. Sometimes you could get more than enough sales and sometime you may not get anything. So it’s really upto that.

The fact that you need patience to build a business also requires money. I get that you can't be rich overnight, but realize that most businesses require you to earn something. If you are going to focus on it full-time then you need it to make enough so that you could pay your bills.

For example, I earn a decent amount right now, if I quit this job and start my own business, and it doesn't earn, then not only I do not have a good business, but also I can't pay my bills and eat food, what am I suppose to pay that with. This is why I believe that even though it shouldn't be something huge, it needs to earn at least enough to pay the bills.

evilgreed

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Businesses are never easy, specially for the ones that have capitalize on a single trend. But yes, even those that have great products or services still fall short at times due to lack of experience or perseverance itself, and even when you have all these, you can still fail on a business depending on a wide variety of reasons. And about ROI, I myself wouldn't suggest any numbers because again, there are a lot of variables to consider when doing a business. Best option would be to just adapt to changes I guess and have at least good enough reserves left to support your business on bad years.

Pujangga

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The competition for giant start-ups is very tight, many giants die because they can't compete with new, more aggressive startups, and I think the RoI of startups is very long, if we can get RoI in a year, we are very lucky.

wxa7115

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Quote from: Rohan Kotkar on April 21, 2022, 09:21:16 AM

Entrepreneurs struggle with their ROI on businesses. Starting a business is not a difficult task but sustaining it becomes challenging. I've seen a numerous companies go bankrupt after good years of sales. Knowing the reason behind is lack of future projections.

According to you, what should be the ROI for newly launched startups?

My views are around 15% per annum but it would take around 6.6 years to earn the initial amount back. Would it be a bad decision?

What happens is that creating a company has a completely different set of problems than maintaining a company, for what I have seen many businesses start too big and acquire too many responsibilities early on which end up crushing them at the end.

So a startup needs to start slow and concentrate on reducing costs as much as they can, because it is obvious by the example that you give that even if a startup was making good money that they were spending even more of it and that is why they went bankrupt, and about the ROI you want it is not out of this world but this is something that you can obtain with many other investments for a lower risk, so at least to me it would not be worth to invest in a startup that gives so little money.

Pejoh Asu

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It takes a large capital to be a startup, this is because the competition is very tight, in my opinion a good start -up is the focus on a large market, and the current trend is online shopping, provide shipping discounts for all purchases so we must have cooperation Strong with expeditions, and if success is usually around 3 years already get ROI.

Kasabus

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Quote from: Rohan Kotkar on April 21, 2022, 09:21:16 AM

Entrepreneurs struggle with their ROI on businesses. Starting a business is not a difficult task but sustaining it becomes challenging. I've seen a numerous companies go bankrupt after good years of sales. Knowing the reason behind is lack of future projections.

According to you, what should be the ROI for newly launched startups?

My views are around 15% per annum but it would take around 6.6 years to earn the initial amount back. Would it be a bad decision?

There is no certainty in expecting for an ROI amount since not all businesses are bound to succeed, others have become doomed in the end. But for an in demand business that will surely work for the customers, the ROI may even hit 80%-100% at the end of the year, but for those who only show slight movement of success, i guess the ROI would only range lower from 20% per annum.

Fivestar4everMVP

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Quote from: Rohan Kotkar on April 21, 2022, 09:21:16 AM

According to you, what should be the ROI for newly launched startups?

When you say "ROI for newly launched startups", I don't recall understand, but I want to assume you mean return on investment for new companies?.
If that is what you mean, then I will honestly use my self as a reference here, if I were to be starting my own crypto company, the last thing on my mind would be ROI, what I mostly would care for so much is to make my company stand by achieving targets and goals, and at the same time aiming for the top, cus I know that ones the company is able to get to the top, My ROI can come even within one year, no need waiting 6.6 years or whatever,(I don't know how you came about this number of years anyway.)

jaberwock

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Quote from: Pejoh Asu on April 23, 2022, 06:59:23 AM

Reports from sources stated that many start -ups that continue to burn money, there are even start -ups that have burned more than 10 years of money and always report losses in large quantities, if startups can get a 15% ROI per year, of course it is good because the current competition is very strict.

Yeah, 15% is already a really good one because there are so many that don’t come any close to that. Some are usually 7% to 10% ROI, so if it’s getting up to 15% then it should be seen as a really good one. Although I’m not saying that something less than that is bad though, the 7% and 10% that I have mentioned are not bad, because a lot of things comes into considering when determining what should be the right ROI, you should compare with other companies and see what they are making.

Mahanton

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Quote from: iv4n on April 25, 2022, 01:27:42 PM

Quote from: Rohan Kotkar on April 21, 2022, 09:21:16 AM

Entrepreneurs struggle with their ROI on businesses. Starting a business is not a difficult task but sustaining it becomes challenging. I've seen a numerous companies go bankrupt after good years of sales. Knowing the reason behind is lack of future projections.

According to you, what should be the ROI for newly launched startups?

My views are around 15% per annum but it would take around 6.6 years to earn the initial amount back. Would it be a bad decision?

It doesn't work that way ... if everyone could count on 15% ROI from the beginning then everyone would be a businessman! Depending on the business, there is no ROI in the first few months/years, you can even be in the red until everything starts, here we say "until the wheel start turning"! Like it's hard to make a wheel starts spinning, but once it starts it will be easier! I said months or years need before that, how much exactly depends on what kind of business you plan to start and many other factors! Only when you put the business on its feet profit start coming! Of course, if you did everything well in the beginning!

Not be that an easy way for you to achieve on and there would be lots of hurdles and challenges along the way but somewhat this is been part because no one hadnt able to experience these things.
When you are doing investment then of course you would be thinking or minding about ROI but you should really be minding on how you would really make your business or investment survive
for long term aspect because this is on where you would be determining if you could really make out profits or not for longer duration.Dont rush up yourself because this would
only create haste decisions which might lead to mistakes.

BuNga_cute

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Quote from: Flexystar on April 25, 2022, 12:13:28 PM

Business is something which should be taken as long term investment and artwork of patience! It’s built stone by stone and you have to have considerable amount of hardship with it. I don’t think math should be put forth immediately. First you need to set up base for it, have recipe ready for your business which includes smart to hard work, management, plan executions and much more. Once you have product or service ready and available in the market then you should start with the ROI maths. Sometimes you could get more than enough sales and sometime you may not get anything. So it’s really upto that.

I agree that business is like we make long term investments, hard work and patience are important factors for success in business. I agree it's better
not to focus too much on calculating ROI when starting a business, it will only be a reason to stop if our ROI calculation is not achieved. The most
important thing in starting a business we must understand the products and services that we will offer, even better if we like the products that we will
offer. After that the most important thing is how we do promotions, so that promotions are maximized, determine the market that really needs
the products and services we offer. If we have done all that, we can start the calculation of ROI. We must remember that loss in business sometimes
we have to experience it first, so that we can evaluate our mistakes. Sometimes we need a long time for our business to grow, like any
long-term investment, we must be patient and never give up if we want to make our business successful.

iv4n

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Quote from: Rohan Kotkar on April 21, 2022, 09:21:16 AM

Entrepreneurs struggle with their ROI on businesses. Starting a business is not a difficult task but sustaining it becomes challenging. I've seen a numerous companies go bankrupt after good years of sales. Knowing the reason behind is lack of future projections.

According to you, what should be the ROI for newly launched startups?

My views are around 15% per annum but it would take around 6.6 years to earn the initial amount back. Would it be a bad decision?

It doesn't work that way ... if everyone could count on 15% ROI from the beginning then everyone would be a businessman! Depending on the business, there is no ROI in the first few months/years, you can even be in the red until everything starts, here we say "until the wheel start turning"! Like it's hard to make a wheel starts spinning, but once it starts it will be easier! I said months or years need before that, how much exactly depends on what kind of business you plan to start and many other factors! Only when you put the business on its feet profit start coming! Of course, if you did everything well in the beginning!

Flexystar

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Business is something which should be taken as long term investment and artwork of patience! It’s built stone by stone and you have to have considerable amount of hardship with it. I don’t think math should be put forth immediately. First you need to set up base for it, have recipe ready for your business which includes smart to hard work, management, plan executions and much more. Once you have product or service ready and available in the market then you should start with the ROI maths. Sometimes you could get more than enough sales and sometime you may not get anything. So it’s really upto that.

MinMan

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I think that this is something that has to do with the industry that you’re into. Every industry is never the same, there are some industries you would be into and the expected ROI would be around 15% to 30%, and some can go as high as a 40% and more.

So, I think that it is best that we study the industry that we are going into, and that would help us come to the conclusion of what should be expected from the start-up. Another you also have to know is that small businesses take a lot of risk, so things can as well differ. Finally, it all comes down to the team, if they play their part really well, everything goes successfully.

Pejoh Asu

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Reports from sources stated that many start -ups that continue to burn money, there are even start -ups that have burned more than 10 years of money and always report losses in large quantities, if startups can get a 15% ROI per year, of course it is good because the current competition is very strict.

AmoreJaz

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Quote from: Viscore on April 22, 2022, 05:26:58 PM

Quote from: avikz on April 21, 2022, 12:30:12 PM

Quote from: Rohan Kotkar on April 21, 2022, 09:21:16 AM

Entrepreneurs struggle with their ROI on businesses. Starting a business is not a difficult task but sustaining it becomes challenging. I've seen a numerous companies go bankrupt after good years of sales. Knowing the reason behind is lack of future projections.

According to you, what should be the ROI for newly launched startups?

My views are around 15% per annum but it would take around 6.6 years to earn the initial amount back. Would it be a bad decision?

If you were a student of business studies, you wouldn't have asked this question. You should know that there is no fixed ROI for sustainability of a business. Sustainability of a business depends on numerous factors and future projection is just one of those factors.

Do a market research on your competitors. Use websites like Statista to gain insights. See what is the average ROI in your field of business and now see prepare a business forecast to see if you beat the average ROI.

Precisely. You can't expect a fixed ROI because the market situation too may differ in some ways. But as long as you hit the average ROI for a certain business, i guess you will see consistency in making profits. Same as you can't guarantee as to how long your business will stay competitive in the market.

and just to give example why we can't determine a fixed ROI, during this pandemic period, you can't get your target roi because of so many restrictions and uncontrolled situations. you can have your estimates but not fixed ROIs. also, it depends on the demand of your services or products. better if it is used massively by regular people but if you only have special niche to tap, that would be hard. also, you need to innovate as your competitors may be upgrading and you need to get ahead of the game as well.

verita1

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If I wanted to start a small business I would like to earn a 30% ROI at the start of operations. I would like a fast food business, these are my ideas, but making it a reality implies good planning to achieve ROI.
I would also have to deal with inflation and market conditions.
But if we take a look at the opinions of the experts we realize that our expectations are a little different.

Quote

According to conventional wisdom, an annual ROI of approximately 7% or greater is considered a good ROI for an investment in stocks. This is also about the average annual return of the S&P 500, accounting for inflation. Because this is an average, some years your return may be higher; some years they may be lower. But overall, performance will smooth out to around this amount.

https://www.forbes.com/advisor/investing/roi-return-on-investment/

Viscore

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Quote from: avikz on April 21, 2022, 12:30:12 PM

Quote from: Rohan Kotkar on April 21, 2022, 09:21:16 AM

Entrepreneurs struggle with their ROI on businesses. Starting a business is not a difficult task but sustaining it becomes challenging. I've seen a numerous companies go bankrupt after good years of sales. Knowing the reason behind is lack of future projections.

According to you, what should be the ROI for newly launched startups?

My views are around 15% per annum but it would take around 6.6 years to earn the initial amount back. Would it be a bad decision?

If you were a student of business studies, you wouldn't have asked this question. You should know that there is no fixed ROI for sustainability of a business. Sustainability of a business depends on numerous factors and future projection is just one of those factors.

Do a market research on your competitors. Use websites like Statista to gain insights. See what is the average ROI in your field of business and now see prepare a business forecast to see if you beat the average ROI.

Precisely. You can't expect a fixed ROI because the market situation too may differ in some ways. But as long as you hit the average ROI for a certain business, i guess you will see consistency in making profits. Same as you can't guarantee as to how long your business will stay competitive in the market.

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