Build a side project ROI tracker

Building a Side Project ROI (Return on Investment) Tracker can help you assess the financial success of your side projects by calculating their profitability over time. To build one, we’ll need to track both the costs and returns associated with each project and then use that data to calculate the ROI. Below is a step-by-step guide to help you build a simple and effective ROI tracker.

Step 1: Define Your Metrics

Before you start building the tracker, you need to define the key metrics that will help you calculate the ROI of each side project:

1. Revenue (Returns):

   • The income or profit generated by your project. This can include sales, subscription fees, advertisements, affiliate commissions, etc.

2. Costs (Investments):

   • These are the expenses you’ve incurred to run the project. Costs may include time (hourly wage or value of time spent), tools/software subscriptions, advertising costs, hosting fees, and any other operational expenses.

3. Time Invested:

   • This is a critical metric for side projects, especially since time is often your biggest cost. Consider tracking hours spent on the project, which can be converted into a monetary value based on your hourly rate.

4. Other Investments:

   • This can include one-off expenses like purchasing assets (e.g., stock photos, plugins, or premium tools), hiring freelancers, etc.

Step 2: Define the Formula for ROI

The general formula for Return on Investment (ROI) is:

Where:

• Net Profit = Revenue – Costs

• Total Investment = All costs and time (monetary value)

Step 3: Choose a Platform for Your Tracker

You can use various platforms to build your tracker, such as:

1. Google Sheets or Excel:

   • These are the easiest options and provide flexibility. You can create custom formulas, graphs, and even automate calculations.

2. Web App (Custom):

   • If you prefer something more sophisticated, you can create a custom web app with frameworks like React, Vue, or even plain HTML/CSS and JavaScript to track and visualize the ROI of your projects.

3. Notion or Airtable:

   • Both Notion and Airtable are great for building a database-like structure with user-friendly interfaces. Airtable, especially, allows you to create a more customizable and trackable system.

Step 4: Build Your Tracker (Google Sheets Example)

Here’s a simple Google Sheets structure you can use:

Columns to Include:

1. Project Name

   • The name of the side project.

2. Start Date

   • The date you started working on the project.

3. End Date (Optional)

   • If the project has ended, otherwise, you can leave it blank.

4. Revenue

   • Input the income generated by the project for a given period (daily, weekly, monthly).

5. Cost of Investment

   • This can be broken down into multiple columns (e.g., tools, hosting, marketing, freelancers, etc.), or you can keep it as a single column.

6. Time Spent (Hours)

   • You can track how many hours you’ve spent working on the project. Multiply this by your hourly rate to calculate the equivalent cost of time invested.

7. Net Profit

   • Net Profit = Revenue – Total Costs (including time value).

8. ROI

   • ROI = (Net Profit / Total Investment) * 100

Example Layout:

Steps to Calculate:

1. Revenue: Enter your monthly/weekly income generated by the project.

2. Costs: Sum up all your costs in separate categories (tools, hosting, marketing, time, etc.).

   • For Time Spent, calculate by multiplying your time in hours by your hourly rate. For example, if you spent 20 hours working on a project and you value your time at $20/hour, your time cost would be $400.

3. Net Profit: Subtract total costs from revenue.

4. ROI: Apply the formula above.

Step 5: Automation & Visualization

If you’re using Google Sheets, you can automate some of the calculations and visualize the ROI data with charts:

• Automatic Calculation: Google Sheets allows you to set formulas for net profit and ROI, which will automatically update as you input new data.

• Visualizations: Create bar or line graphs to visualize ROI trends over time. For example, you could create a graph that compares the ROI of different projects or shows how your ROI is changing month-to-month.

Step 6: Review & Adjust

Regularly review your ROI tracker to ensure you’re making data-driven decisions. If you notice that a certain type of investment (e.g., advertising) leads to higher returns, you might consider increasing that aspect of your project. Conversely, if a project isn’t generating positive ROI, it may be time to rethink your approach or discontinue it.

Optional: Adding More Complexity

If you want to track more detailed aspects of your projects, consider adding the following:

• Revenue Streams: Track multiple revenue streams (e.g., product sales, ad revenue, affiliate income) for a more granular breakdown.

• Forecasting: Predict future revenue and ROI based on historical data. This can help guide your decision-making for scaling or adjusting investments.

By setting up a systematic ROI tracker for your side projects, you’ll gain clarity on which initiatives are the most profitable and worth your time and effort.