Select Page

return on investment is just ratio of profit relative to expenses

to make expenses projections:
make a line in a spreadsheet for each thing you will pay for, the columns will be months forward. do it for time you can predict maybe 3 months or 2 years

then summarize the subtotal expenses per month

do same to assume(predict) income, do assumptions, like conversion rates, like like very 1000 people pass by 100 enter, each 10 people enters 1 buys. assume you will find 100 people each week 10 of them will buy then you can multiply it to get monthly income
subtotal the income per month

calculate monthly gross profit. by subtracting monthly expenses from the monthly income.

then calculate monthly taxes

then calculate net profit by subtracting taxes from gross profit

then summarize net profit per month over the period

return on investment is ration of net profit to total expenses

roi = net profit / total expenses * 100

the times 100 is to make it percents from a ratio

for important investments it is better to ask and find the real numbers. some investors and banks have industry failure rates, it is better to research even online why such businesses failed and what is the failure rate in that industry. i guess you are not different.
also it is possible to find similar financial reports of companies like you plan and see the ratios they have, as percents of income, like expenses are 90% of total income.

maybe stand and look on your side of street to see the number of people passing,
how many enter a store. so you can do like entered/passed know the probability of entering a store.
and how many people pass there.

look around how many buildings are there to estimate the number of people live in this area, to know how much people a store serves.

or in digital world,

how much downloads a new app gets in some search term. or on ebay like how much buys are there in a some category on a price level