Reinvesting in the Business
» Reinvesting in the Business, Volume 3, Issue 3, 2003
When I use the term MAJOR investment in your business, I mean an investment or series of investments where the total purchase price amounts to around 5 percent or more of your annual gross receipts.
7. When you consider making a MAJOR investment in your business, how do you assess its financial viability? Do you primarily use:?
Response | ||||
---|---|---|---|---|
1 | The payback period | 19 | ||
2 | The rate-of-return | 32 | ||
3 | Gut feel | 25 | ||
4 | Combination | 11 | ||
5 | Other | 6 | ||
6 | Not applicable - no major investments | 3 | ||
7 | DK/Refuse | 5 | ||
Total (%) | 101 | |||
N | 751 |
Notes: Thirty-two (32) percent of small employers use a rate-of-return calculation to assess the viability of a major business investment (Q#7).