Topic: What should be a good ROI for a startup? - page 3. (Read 402 times)

Unless you add those incomes back to your capital and lessen that 6.6 years of yours. This is our story, we are nearing our 2nd year of our small business since it started running way back  June, 2020. I have seen a lot of changes in just a year. That small amount of money had become to the point that we've manage to get a decent car, house and lot, and paid bills not exceeding a thousand dollars a month. We have manage to rake 20 to 40 percent income per month, it depends on the business you have.

We started on an 800 dollar worth of products, and now it is worth around 40k USD all in all. All we did was put all the profits back to capital and bought more products to sell, and we did not stop until this day, we are going to continue and hopefully it gets better. By the way the products that we sell at first was, disposable mask since it was so hype back when COVID was just starting. We've moved to beauty products now since most people here stayed at home. Later on we've also entered the food and clothing sector, which is imported from different countries. I have realized that all consumables are easy to sell unlike clothes and other things that are not essential goods. People needs food, hygiene and clothing, and this was our target from the start so I guess it is all good for now. At first it was just meant to make ends meet, but then we've become busy these days and never thought of gaining more than we have ever wanted.

It is quite difficult for a startup to predict ROI. At the time of the formation of a startup, 70% -80% still do not understand that they simply will not reach the estimated level of implementation of the project itself within 9-12 months. After that, they are waiting for the extinction and loss of investor interest. The rest will clamber and try to do something. Only a few of them will survive. Fantasies and ideas are great! The implementation of a working project, the market, the nuances and competitors are completely different. Measuring and setting ROI for a startup is a very dubious act....

It's impossible to put a definitive figure on this as it is so wide ranging. If you're starting a shop selling sweets or a hairdresser, you have quite static costs and should be able to judge your income stream fairly quickly. If you're pioneering a new type of online game, hoping to see it skyrocket in popularity to pay off your bank loans, then it is quite possible to jump your income hundreds of percent per year. Any company selling a product should generally aim for 100% profit on each item if they are not generic, which would translate into reasonable margins above what you're expecting. If you're looking at it from the eyes of a venture capitalist, then 15% is definitely not worth it - you can buy into some well established companies with a steady income that make close to that for much less risk.

Do you mean real world businesses or investment? I would say that 15% per annum is a bit far off or could really be attained in a short term duration but it would be depending on what kind of business

you are running into because it all matters with the demand of course but 15% is a bit conservative.If we do talk about crypto investment or something like that then it would really be just too small

to target or to make it as a goal and it would be more much better if you do aim or target bigger percentage i would say.

ROI for startups? Lol. If you would see most of the scaled startups around 80% of them are unprofitable even at the EBITDA level which is Earnings before Interest Depreciation & Amortization. This means they are running on zero ROI in fact most of them are just burning cash. Startups these days are more about increasing your revenues even if that comes at a huge acquisition cost, also some startups don't even work for revenue, they are running and scaling due to their increasing consumer base, so I don't think you should worry a lot about ROI in the initial stages of a startup, Focus on improving customer acquisition, retention & satisfaction and just try to avoid cash-burning, try liquidating your equity a bit by finding investors because that would be the only quick way to scale up your business.

I will say that even 10% or lesser ROI after all the wages for a startup is good,all they have to do is to think about their short term goals that is where most of the entrepreneurs are failing and end up bankrupt. Before starting any business they need enough knowledge without it the capital amount is at high risk.

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.

15% per annum is not unreasonable for an investor to aim at for the year. But I don't know how you mean by 6.6 years, you mean to get back the invested money ? How do you get to such calculation for 15% profit in 6.6 years time, you didn't take into consideration of tax, inflation etc.

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?