The VLN brings a host of strategic, operational, and safety benefits thefor we shouldapproach ROI from a value-based and risk-adjusted perspective, not just a simple revenue-minus-cost model.

🔍 Value Drivers

  1. Increased Tender Wins & Contacts Won

    • If the system helps win 1–2 more contracts per year, what’s the average profit per contract?

    • Even a single new contract could justify the investment.

      Improved Efficiency

    • Finishing projects earlier = cost savings + potential for more projects per year.

    • Estimate: If you save 5–10% of project costs or time, what’s that worth annually?

    Reduced Downtime

    • Operating in high winds = fewer shutdowns.

    • Estimate how many days per year are typically lost to weather, and what that costs.

    Safety Improvements

    • 63% fewer injuries = fewer claims, less lost time, lower insurance premiums.

    • Estimate: If injury claims cost $X annually, a 63% reduction saves $0.63X.

📈 ROI Estimation Strategy

We can build a scenario-based ROI model:

Benefit CategoryConservative EstimateOptimistic EstimateExtra Contracts Won$50,000$150,000Efficiency Gains$30,000$90,000Downtime Reduction$20,000$60,000Safety Cost Savings$25,000$75,000Total Annual Value$125,000$375,000

Then:

ROI (Year 1):

  • Conservative:

    ROI = ((125,000 − 250,000) ÷ 250,000) × 100 = -50% means you lost half of your investment.

  • Optimistic:

    ROI=(375,000−250,000250,000)×100=50%ROI=(250,000375,000−250,000​)×100=50%

Payback Period:

  • Conservative: 2 years

  • Optimistic: <1 year

📅 Timeframe for Return

If even the conservative scenario holds, you’d break even in 2 years. If the optimistic scenario is closer to reality, you’d recover your investment in under 12 months and start generating positive ROI in year 2 onward.

💼 Investment Cost:

  • $250,000

📊 Conservative Scenario:

  • Extra Contracts Won: $50,000

  • Efficiency Gains: $30,000

  • Downtime Reduction: $20,000

  • Safety Cost Savings: $25,000

  • Total Annual Value: $125,000

  • ROI: −50%

  • Payback Period: 2 years

🚀 Optimistic Scenario:

  • Extra Contracts Won: $150,000

  • Efficiency Gains: $90,000

  • Downtime Reduction: $60,000

  • Safety Cost Savings: $75,000

  • Total Annual Value: $375,000

  • ROI: +50%

  • Payback Period: 0.67 years (~8 months)

To calculate Return on Investment (ROI), you can use the following formula:

📌 ROI Formula

ROI (%) = ((Total Annual Value - Investment Cost) / Investment Cost) × 100

📌 Payback Period Formula

Payback Period (years) = Investment Cost / Total Annual Value

📌 Example (Conservative Scenario)

Investment Cost = $250,000 Total Annual Value = $125,000 ROI (%) = (($125,000 - $250,000) / $250,000) × 100 = -50% Payback Period = $250,000 / $125,000 = 2 years