Prioritize Investments

Put your limited time and money where return is highest.

What this is for

Choosing between competing opportunities—so you invest in moves that move the needle instead of spreading resources thin.

What you get

A ranked investment list (projects, hires, features, marketing)

A repeatable decision filter for new opportunities

Clear trade-offs when resources are constrained

Confidence you’re funding the best bets first

Core logic

Every dollar and hour has an opportunity cost. Score each candidate investment by expected return (value) versus required input (cost, time, risk), then fund in descending order until your capacity is allocated. New opportunities only replace weaker ones with explicit trade-offs.

Step-by-step

List potential investments

Examples: new marketing channel, product feature, hire, customer acquisition push, process improvement.

Estimate expected return

Quantify in revenue lift, margin improvement, risk reduction, retention gain, or strategic positioning (use a 1–10 scale or dollar proxy).

Quantify cost & constraints

Include cash outlay, time to execute, ramp time, and risk/uncertainty (adjust returns downward if confidence is low).

Compute a priority score

Simple formula:

Priority = (Return × Confidence) / (Cost + Time equivalent)

Normalize if needed to compare apples-to-apples.

Rank and allocate

Fund the highest scores first. Set a soft cap (e.g., top 2–3 “power bets”) and defer lower-ranked items unless something drops out.

Force trade-offs on new ideas

Any new proposed investment must displace an existing lower-priority one—document what gets paused or cut.

Review cadence

Weekly or after major milestones, update actual outcomes vs. estimates and re-score to capture learning.

Decision thresholds / guardrails

Low confidence with high return → Run a quick validation experiment before full commitment.

High cost, marginal return → Delay or break into smaller phases.

New opportunity without replacing an existing lower-priority one → Reject or require explicit trade-off.

Diminishing returns on top bets → Rebalance; don’t keep pouring into saturated opportunities.

Examples

Service business:

Comparing hiring a sales rep (high upfront cost, long ramp) vs. improving referral incentives (low cost, fast return) — referral wins the week’s budget.

E-commerce:

Deciding between launching a new product line (medium return, high effort) vs. optimizing checkout to reduce abandonment (high return, low effort) — prioritize checkout fix.

SaaS:

Choosing to build a feature requested by a small segment (low return, high dev cost) vs. improving onboarding for all users (broad impact) — improve onboarding first.

Thinking checks

Are you investing in the top 2–3 highest-priority opportunities, or diffusing effort?

Does every new investment displace something lower-leverage?

Are your return estimates grounded in recent data or just hope?

Are you learning and updating scores based on what actually worked?

If the answer is no…

Pause new commitments.

Re-score your current slate with the formula.

Reallocate to the highest-leverage items and document what was deprioritized.

What to track (minimum)

Estimated vs. realized return per investment

Resource share (time/cash) on top-ranked bets

Number of investments displaced for new ones

Confidence drift (how often assumptions change)