7 Business Concepts You've Never Heard of (But Will Make You LOTS of Money) | Ep 675
The Game with Alex Hormozi
00:00
Exploring Business Concepts and Return on Invested Capital
Understanding the return on invested capital is essential for expanding a business. Different businesses have varying capital expenses to factor in when expanding their operations. Knowing the cost of expanding, such as opening a new location, and the resulting cash flow is crucial. Calculating the payback period, one-year return, and capacity profit helps in determining the return on investment. Ideally, a ratio of 3:1 or higher is desired, meaning for every dollar invested, a return of at least $3 is expected. This return profile justifies the time and effort put into the investment, ensuring a strong return over time.
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