For years I have been helping potential consulting clients to figure out the ROI on their investment of consulting. Also, when I’m deciding whether to invest in a new marketing idea, I always run my return on investment formula.
I realized that I wanted to share this. At first I had a PDF, but then I thought, what if it was a cool return on investment calculator. So I:
- Posted a job on UpWork (where I find most of my project-based virtual staff)
- Took the code and had Aaron from Legendary Lion make it pretty and then wrote some short code so I could insert it into any post
- Wrote this blog post about it
Understanding the ROI Calculator
First, what’s ROI?
ROI (Return on Investment) is forecasting what you expect to get back on your investment. Here are examples of investments you may want to know the ROI:
- Consulting services
So what’s in this Return on Investment Calculator?
Average Number of Sessions
This is the number of sessions that an average client sees you. How long is it from the intake until discharge? 5 sessions? 10 sessions? 7.8 sessions?
On average, how much is your rate per session? If you take insurance, you’ll want to try and average out your reimbursement. A great way to figure this out is:
- How many sessions did you do last month?
- What was the gross revenue for the practice?
For example, if you had 50 sessions last month and your gross revenue (before expenses) was $5,000, then take $5,000/50 = $100 per session
Total Sessions per Week
On average, how many counseling or consulting sessions did you have per week? For example:
- Week 1: 14 sessions
- Week 2: 19 sessions
- Week 3: 22 sessions
- Week 4: 12 sessions
Total sessions: 14 + 19 + 22 + 12 = 67 sessions
67/4 weeks = 16.75 sessions on average per week
This is pretty straight-forward, what do you spend money on every month?
So this is where it might get confusing. Here are some examples of investments you would want to find an ROI:
- Private Practice Consulting: If you are bringing on a private practice consultant you definitely want to have a good idea of when you can pay yourself back for that investment of time and money. Say consulting was going to cost $2,380 over a 4 month time period ($595/month) that would be your first number in the ROI calculator.
- Advertising: Maybe you listened to my podcast with Dan Wendler and you are doing some Google ads. Maybe you budget $500 for that advertising campaign. Or a local newspaper says you can buy an ad for $750.
Expected New Clients
This is where you can play with the numbers. If you get 1 new client, how long will it take to pay yourself back? What if you get 3 or 10, when is it really worth the investment?
Joseph R. Sanok, MA, LLP, LPC, NCC
Joe Sanok is an ambitious results expert. He is a private practice business consultant and counselor that helps small businesses and counselors in private practice to increase revenue and have more fun! He helps owners with website design, vision, growth, and using their time to create income through being a private practice consultant. Joe was frustrated with his lack of business and marketing skills when he left graduate school. He loved helping people through counseling, but felt that often people couldn’t find him. Over the past few years he has grown his skills, income, and ability to lead others, while still maintaining an active private practice in Traverse City, MI. To link to Joe’s Google+ .