ROI is the potential return on investment for a given item. It simply indicates how much you can get from it.
Leasing a rental LED display might be a wise choice if you’re considering starting a new investment project because it can boost your sales and generate a lot of favorable feedback, such as a higher ROI and a strong brand image.
You may ask—How do we estimate the ROI. How can profits be maximized?
Don’t worry! This article will guide you in 2 ways!
Whether you are new to the rental LED industry or have some experience, we believe this article will answer some of your questions.
·Factors Determining the Rate of ROI
To calculate the ROI of a rental LED display business, you need to understand 3 factors that determine the end result: net sales and profit, projected revenue, and expenses involved.
(1) Net sales and profit
If your business is running for two months, then you can calculate your net sales and profit for the two months by comparing the income after the two months with the payment before. It should be noted that you need to subtract the total revenue of the rental screen from the loss incurred during the rental process, and only then can you arrive at your net sales. (Net sales = sales revenue – sales refund amount)
(2) Project income
It depends on how much business you have every day.
(3) Expenses involved
This includes the price of renting space, paying for electricity, hiring labor, and other expenses.
·How to maximize profits?
There are 2 ways to approach this: reducing costs and raising rental income.
(1) Cost control
Making a profit is the primary goal of renting out rental LED screens—the profit increases as the cost decreases. Therefore, you have the option to limit the costs of administration, production, circulation, raw materials, and so forth.
You may wonder how we can cut costs. Let me give you an example: by increasing sponsorship revenue.
First, you must determine who will be your sponsor.
Second, you must be clear about what you can offer potential sponsors.
Third, determine who decides on event sponsorship. It is convenient for you to contact the communication team or the marketing department.
Fourth, when should you launch a sponsorship campaign? Because roughly half of the companies’ sponsorship decisions will be made in the fourth quarter.
Consider these questions to help you identify the people most likely to participate in your sponsorship event, as well as suitable offers with specific goals.
(2) Increase rental income
Profit is created by income. Without the guarantee of payment, there is no possibility of profit. The increase in leasing income mainly depends on the leasing business volume, which can be achieved by expanding sales channels or providing some preferential packages for lessors.
First, request that a professional team provide you with creative ideas or professional advice so that customers can select the best product for their event.
Second, create some appealing advertisements and attract customers through events such as lucky live draws.
Third, offering rental screen-related services to customers can broaden your business’s scope. For example, you could provide your sponsors with a fee-based rental option or advertising campaign planning.
Rental LED displays are essential for event planners. Figuring out the possible ROI and how to find sponsors can largely offset your rental LED display costs and even bring you extra income. To that end, we need to understand what affects our ROI and what we can do to improve it.
Ultimately, choosing an LED display rental company willing to help you maximize your sponsorship income may save you a lot of work. BIBI LED is delighted to assist you!