Startup Funding Espresso -- Payback Period for the Product
Payback Period for the Product Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Investors look for strong margins on a startup's product as it\u2019s a positive indicator of customer interest and a profitable business.\xa0 One way to metric this is the payback period for your product.\xa0 It\u2019s the amount of time it takes for a customer to repay the cost of customer acquisition.\xa0 To calculate, use the marginal gross profit and the sales and marketing expenses. If you take the quarterly or annual numbers, you should be able to smooth out the minor variations that come from discounts. Many companies start with a low price and, over time, raise the price. This forces the company to create an efficient go-to-market strategy from the get-go. As you grow your business, you can raise your prices, so the revenue flows to the bottom line.\xa0 Calculate your payback period and use the metric with investors. This demonstrates you know your numbers and are improving margins and efficiency over time.\xa0 Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.Let\u2019s go startup something today. ___________________________________ For more episodes from Investor Connect, please visit the site at: \xa0 Check out our other podcasts here: \xa0 For Investors check out: \xa0 For Startups check out: \xa0 For eGuides check out: \xa0 For upcoming Events, check out \xa0\xa0 For Feedback please contact info@tencapital.group\xa0\xa0\xa0 Please , share, and leave a review. Music courtesy of .