We know investing in our goals works. But which investments will help us achieve our business goals—and even pay us back for the money spent?
To find out, we decided to do a little research on the return on investment (ROI) for different types of business investments. For example:
- Online courses and trainings
- Certification programs
- Coaching
And, yes, we have personally tried all of these!
How to Calculate ROI
Calculating return on investment for your consulting business requires knowing three things:
- How much you spend on a product or service.
- What you intend to gain from that produce or service.
- What you actually gained from a product or service.
ROI calculations often come down to dollars. Say you spend $5,000 on a business program. The program helps you earn $10,000 you otherwise would not have. To calculate ROI, you divide the gain ($10k) by the original investment ($5k), resulting in a 200% ROI. In other words, you gained twice what you put in.
While dollars and cents are an easy way to calculate ROI, there are often other, less quantifiable returns we get. That’s why it’s important to know your goals. For example, some nonprofit consultants don’t necessarily want to earn more, they just want to work less (and earn the same amount). Others are struggling with their confidence or don’t know how to talk about their services (and thus are losing potential clients).
This is one reason we’ve been talking so much about goal setting lately. Understanding your goals can help guide you toward what types of investments will help you most.
Online Courses
Raise your hand if you’ve purchased an online course in the last 12 months. Now, keep your hand up if you completed that course.
Don’t worry, you’re not alone. Only 5-15% of people complete the courses they buy online. Yet the online education market is set to rake in $185 billion in 2024.
A lot of us are buying courses, but few of us are completing them. This makes for a very low return on investment if you are the buyer (and a high return if you are the seller). It’s worth noting since, as nonprofit consultants, you may eventually be both! (Note that, if you do start selling courses, there are strategies to increase your audience’s completion rate.)
Certifications
If you’re adding a new service to your business and don’t have extensive hands-on experience with it, you might consider a certification. For nonprofit consultants, common certifications include:
- Facilitation methods
- Strategic planning methods
- Grant writing
A professionally recognized certification can give you confidence and even practical experience that will benefit you and your clients. But a certification on its own won’t necessarily deliver a return on investment.
You still need to know what to DO with that certification. How do you transform your newly documented skills into business and impact?
Several years ago, we at Funding for Good wanted to add strategic planning services to our business. We received certification in the Technology of Participation method for facilitation and strategic planning. Since then, we’ve used these methods successfully with dozens of clients.
We know other successful consultants, though, who have not pursued additional certifications and still have thriving businesses. For example, if you have been writing grants for a decade, you probably don’t need a grant writing certification.
The key to getting a good ROI on a certification is having a plan to use it. Sometimes you need help to create that plan, which is where business coaching can come in.
Coaching Programs
In recent years, business coaching has been growing exponentially. Thankfully, researchers have been eager to evaluate whether coaching delivers measurable results and at what scale.
One oft-cited study finds a 529% ROI for coaching, meaning the company studied received $5 in value for every $1 spent. Another study demonstrates how coaching contributes to business performance especially when focused on a specific, measurable goal. Looking more comprehensively at the impact on individuals, research shows that business coaching delivers:
- 70% increase in individual performance, including goal attainment and higher satisfaction.
- 48% increase in organizational performance, including increased revenue.
Our experience working with nonprofit consultants in our 1:1 Consulting Boot Camp also reflects this data. 100% of consultants who have started Boot Camp finished it. Some even return for a second session!
We’ve seen our Boot Camp alums triple their income, land new, higher-paying clients, and hit six-figure years while still working part-time. And, yes, these are individual experiences. But they are supported not just by our experience, but by a robust body of research.
How will you invest in your business?
If you’re ready to get serious ROI for your business investment, registration is now open for our next 60-Day 1:1 Consulting Boot Camp session!
