Revenue Impact Ratio

A framework for presenting business opportunities by comparing costs to revenue impact, focusing on clear value propositions.

Core Concept

• Present opportunities by showing small costs that lead to large revenue impacts
• Example ratio: $1,000 cost → $10,000 revenue (10x return)
• Makes value proposition immediately clear to decision makers

Key Elements of Effective Presentation

• Keep numbers simple and memorable

  • Use round numbers
  • Show clear multiples (5x, 10x, etc.)
  • Make it easy to understand at a glance

• Focus on net new revenue

  • Show direct impact on top line
  • Emphasize additional revenue generated
  • Demonstrate clear causation between investment and return

• Demonstrate clear ROI

  • Show specific cost amounts
  • Link directly to revenue outcomes
  • Make the multiplier effect obvious

Real World Application

• Sales Pitches

  • "Spend $1,000 on our software, get $10,000 in new sales"
  • Makes value proposition immediately clear
  • Easy for customer to understand return

• Internal Projects

  • Present costs vs revenue impact to leadership
  • Makes business case obvious
  • Helps prioritize initiatives with highest return

Why It Works

• Simple mental model for decision makers
• Clear connection between investment and return
• Easy to evaluate against other opportunities
• Focuses conversation on value rather than cost

Common Mistakes to Avoid

• Making numbers too complex
• Using unclear multipliers
• Not showing direct causation
• Focusing on costs instead of returns

The framework helps decision makers quickly understand the value proposition and potential return on investment for any business opportunity.