Article was written by Tomas Horejsi, Finance Coaching & Consulting International

Having 20 years of experience as a senior finance executive for international companies in Europe and the United States, I set out to explore how financial thinking can help in coaching and consulting and how it can improve the coaching business.

There is a very important ratio well known in business and widely used by Certified Public Accountants (CPA) and other finance people, called Return on Investment, abbreviated as ROI. This ratio basically tells us how many dollars are gained as result of investing one dollar.

I could not help myself so when I was in discussion with one potential client and I calculated the ROI ratio of the anticipated project. The ROI % was an amazing 525%, which means that every dollar invested brings $5.25. I presented the ROI calculation and a client agreed to the assignment and hired me.

 

There are a couple things I have realised about this ROI concept:

  1. Speak the same language as decision makers.

Every company has decision makers. The decision makers (and their bosses) are usually interested in financial KPIs (Key Performance Indicators). A good ROI on a coaching project makes good KPIs so there is a high likelihood that a coaching service proposal with good ROI will be accepted. This is because decision makers know that such a project will bring their company good financial results. And their success depends if they deliver KPIs set up by financial plans.

  1. Use the ROI concept during the negotiation.

The ROI calculation and presentation is very powerful during the negotiation phases when trying to develop a new business or trying to get a new assignment. The common trap during negotiations is to talk only about concepts, stories, cases, but the hard facts are usually more relevant to decision makers. A simple sheet with some financial figures on it is usually more digestible for CEOs (and other decision makers) than long stories.

  1. Use ROI to keep and sustain your business.

It is also extremely helpful when we want to keep our existing coaching business. During difficult times or during changes within companies, coaching or consulting is usually the first service being cancelled. With ROI calculation, the likelihood of this scenario is highly reduced because relevant people see how eventual cost cutting influence revenues and benefits.

  1. Use ROI for your case studies.

ROI calculation can be also prepared for all our previous coaching or consulting engagements as case studies, so we are well equipped and prepared for meetings with clients and negotiation. Showing clients that our previous coaching assignments have brought high ROI makes significant breakthroughs more likely. Such presentation usually adds more credibility than just a plain list of previous assignments.

  1. ROI will get you a business.

ROI calculation is also extremely powerful for the initial discussion with a potential client. Preparing the ROI estimate just after the first meeting and presenting such a calculation to a potential client makes a big difference. It not only motivates the client to see the instant financial gains as a result of coaching but also gives something tangible before a decision is made.

 

Do you want to succeed with ROI?

I have prepared an example of ROI Calculation scenario with concrete financial costs and benefits and a calculation of ROI, payback period and graphs.

If you are interested to receive a FREE pdf of this ROI Calculation tool just send me a direct email: tomas@fc-ci.com AND follow my FB business page not to miss any further article about ROI.

Author: Tomas Horejsi has 20+ years’ experience in the corporate finance as senior finance executive (Chief Finance Officer etc) with top Fortune 500 international companies in Europe and USA– SEPHORA (LVMH Group Louis Vuitton Moet Hennessy), Dover, Cemex, Tesco Stores, Royal Ahold, Mediterranean Shipping MSC, Gefco, Unilever, KPMG. He has an ACC accreditation with the ICF (International Coach Federation) and is Certified IECL Coach (Institute of Executive Coaching and Leadership), Sydney. He is a founder of Finance Coaching & Consulting International Company (FC&CI). My email: tomas@fc-ci.com