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ROI Analysis


Understanding the Return on Investment Analysis

Businesses operate on limited budgets, so every expenditure literally precludes some other outlay. For this reason, it’s commonplace for business owners and managers to consider the Return on Investment of their expenditures, as a way to help ensure they are getting the best possible results from their available budget.

The Return on Sign Investment Calculator supports this kind analysis very well.

By entering the fixed and ongoing operating costs of your new or upgraded sign, and the estimated or actual financial results it generates, it’s simple and straightforward to calculate the income and profits that can be anticipated from the relevant expenditures on signage.

It should be noted that, over the relatively long life of any high-quality sign, the ongoing maintenance costs tend to swamp the original purchase price. This brings the sign’s Warranty powerfully into play, because the longer the Warranty (Industry Standard = One year; Metro Sign and Awning Standard = Three years; Metro Sign and Awning Extended Warranty = Five years, covering all risks), the less you are like to spend on the sign over its useful lifetime. Lower maintenance costs not only save money directly, they significantly increase any sign’s Return on Investment.

This Return on Investment can then be compared with the returns on other investments – even ones as diverse as equipment, training, inventory, or real estate – as a way to evaluate the practical business value of the signage.

Note that any Return on Investment analysis is not as simple or meaningful as many business owners and managers expect. For one thing, ROI is a ratio of investment to return that is likely to change as you increase or decrease the level of investment. For example, spending $10,000 on new or upgraded equipment may produce a 10 percent return. But doubling that equipment investment to $20,000 may cause the ROI to drop to only five percent.

What’s more, typical ROI calculations generally jumble together a good many unspoken and unexplored but nevertheless important considerations, such as:

  • To what extent is your investment helping to pick off the low hanging fruit?
  • What specific elements of the expenditure are primarily driving the observed return?

Thus, ROI is a good first step for performing a high-level analysis of any business expenditure. But data permitting, it can usually be augmented by more detailed analyses that have the potential to pinpoint more precisely where dollars can best be allocated and how a business can optimize its activities.

Questions about how much a sign costs?
Contact Metro Sign and Awning for a copy of our no-cost/no-obligation options for receiving your individualized ROI Calculator results.

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