Sometimes in business its hard to see past the money going out, perhaps you know that an investment could be a great way of getting new customers and growing your company but its hard to see beyond the money aspect?
Here’s how to decide if the ratios will work out for you…
- Closely look at or calculate your own average margin per event. This is your overall sales minus the direct costs for it to happen such as travel, equipment etc. You should be able to do this through most online accounting systems or a set up a simple spreadsheet.
- Once you have your average margin, then look at the cost of the investment. If the cost of the investment is less than your average margin per event then is definitely worth investing, provided you are looking of ways to grow your business of course!
- Now consider this - The service provider you have invested in is definitely going to want you as a customer for life. So, they will do everything they can to impress you and bring you the return you need, which they know is the best way keep you loyal to them.
- If the investment is slightly higher than your average margin per event, you need to calculate how many events you would need to secure from the investment to make it work. As well as the number of event confirmations you need, consider the feel, look and quality of what is being offered. How does that product make you feel towards it, check out their social media too as that is always a good benchmark. Are other companies like yours using them? Can you picture people using that product on a mass scale?
- Should it take more than a double figure number of events to cover the investment made, it’s likely to be a good idea to hold back the investment until you have raised your average margin.
With any investment like this you can never be 100% certain, but at Event Service Check we are here to help and reassure you!