Are you worrying that the goals you have invested your time and energy into pursuing, may not be worth it?
Or maybe, you noticed that the ROI on your goals is not as high as you would want to see?
Are people around you telling you you’re wasting your time/effort/money…?
If you are an entrepreneur, or want to become one, you know what I mean the keystone question: Is it really worth it?
Of course, you can quit your day job and concentrate on building a boutique baking business, but is this going to give you the financial freedom you need to travel the world? Or yes, you could found your own start-up, but is this the best way to pursue entrepreneurial career path? Should you rather seek an internship with an existing company?
All sorts of investors face similar questions every day: bonds or stock, mature or start-ups? Whats going to take me to my goal and by when? What’s worth my money, time, and effort?
Investors have various metrics and formulas to assess investment opportunities and help make decisions. Lucky them! They plug some numbers into their clever formulas – and hop: a suggestion pops out of the Excel spread sheet.
Could you use any of their tricks to predict the best ways of investing your time, effort and money?
Having just cut my losses on pursuing what appeared to be an obvious, but as it turned out inefficient way of achieving a career milestone, I decided to dump those goals completely and change my goal-setting process. Given I’ve already wasted a lot of time, effort and money I decided to only pursue goals with high ROI (Return on Investment).
ROI (Return on Investment) is a way of measuring profitability. The formula for ROI is:
ROI = (the gain from investment – the cost of investment) /cost of investment
As you can see, to increase ROI, you need to increase the profit or reduce the cost. For most powerful results, combine both.
But how can you do it?
1) Streamline your goals by limiting your focus to 5 key items
Warren Buffet has a simple approach to goal setting:
- write down the Top-25 goals you want to achieve over a chosen period of time
- circle the Top-5 of those 25 – these are your goals
- cross off the remaining 20 – this is your ‘avoid-at-all-cost’ list.
Be honest, pursuing too many goals at the same time is unrealistic. We only have so much time and energy. Decide what you want to achieve now, abandon attempts to pursue everything else and stop feeling guilty about it.
2) Reduce the cost by improving efficiency
Look at your approach to working towards your goals. Can you do anything to improve your efficiency? Can you employ some ‘shortcuts’ to free up time and energy to pursue your goals? Can you learn some time saving skills or implement a routine that would reduce your willpower/energy usage?
Are there any tasks (e.g. your weekly cleaning or book-keeping) you need to have done, but could be outsourced in a cost-effective way?
3) Increase your profit by focusing on most profitable paths using The Pareto Principle
Now you know the Top-5 goals you want to dedicate your time and energy to, look at all possible scenarios that can get you there.
If you want a job in a start-up as a non-technical founder, how can you achieve it? Start your own company? Join an existing start-up? Get an internship?
Look at the effort, time, and money investment required for each of those paths. Consider potential gains. Which of those paths can get you to your desired results with least investment?
Narrow your focus to those 20% of your opportunities that are likely to bring 80% of results. For the above scenario, you may decide that joining an existing company path is the best way forward.
Now, choose your key activities. Consider all possible ways of getting to your opportunities. How can you find out about start-ups job openings? Job boards? Start-up meet-ups? Your own network? Do the same ‘mental maths’ with the possible paths, using the 80/20 rule. Focus on the 20% of opportunities that can yield 80% of results.
4) Accelerate your profits
One of the most frustrating but critical things about pursuing your goals is seeing the results. Youve probably heard that many times: secure some early wins, go after the long-hanging fruit. I’d advocate the same approach for high ROI goals: get some early wins underway. If you can’t create opportunities for early wins, it may be a warning sign that this pursuit requires more investment that originally thought – watch it carefully!
5) Make sure you are getting what you’re after
Tracking your progress when using this approach is even more important. If you’re putting all your eggs into one or two baskets, you really want to make sure this is the right basket. So keep an eye on your progress.
Clearly define your metrics and track them. Put time limits on your pursuits. This will depend on your goals, time resources and patience, but if you’re truly dedicated to going after high ROI goals, have some close deadlines to make sure you’re not wasting your time.
If you notice that your approach is not bringing the expected results in the expected time, review it. Are you pursuing the right goals? Have your chosen the most profitable paths? Are you focused on what you should be focused on, or have you picked up some less relevant activities, or worse – started getting distracted by the items from your ‘avoid-at-all-cost’ list?
Review your goals, your commitment to them, your time/effort involvement and the most profitable path regularly.
Whatever you chose, make sure the system works for you. If you keep a close eye on it, you can avoid costly mistakes and achieve your goals with minimal time, effort and monetary investment.