"Automation saves time and money." Everyone says it. But how do you actually know if it's worth the investment for your specific business? Here's how to do the math.
The Basic Formula
ROI calculation for automation isn't complicated, but most people skip it because they don't know what numbers to use. Here's the simple version:
ROI = (Time Saved × Hourly Cost × Months) - Build Cost
How to Calculate Your Numbers
1. Time Saved Per Week
Track how long your repetitive tasks actually take. Be specific. Don't say "we spend a lot of time on data entry." Say "we spend 6 hours per week copying data from emails into our CRM."
Common tasks that automation handles well:
- Data entry between systems (1-10 hours/week)
- Sending routine emails and follow-ups (2-5 hours/week)
- Generating reports from multiple sources (1-3 hours/week)
- Scheduling and calendar management (2-4 hours/week)
- Invoice processing and tracking (2-6 hours/week)
2. Hourly Cost
This isn't just salary. Include benefits, overhead, and the opportunity cost of that person's time. A $50,000/year employee probably costs you $30-40/hour fully loaded.
3. Build Cost
Get quotes. Our automations typically range from $2,000 for simple workflows to $15,000+ for complex multi-system integrations. Factor in any monthly software costs too.
A Real Example
Let's say your office manager spends 5 hours per week manually entering data from your booking system into your accounting software.
- Time saved: 5 hours/week = 20 hours/month
- Hourly cost: $35/hour (fully loaded)
- Monthly savings: $700/month
- Build cost: $4,000 one-time
- Breakeven: 5.7 months
After month 6, that automation is putting $700/month back in your pocket. Over 3 years, that's about $21,000 saved on a $4,000 investment.
When Automation Makes Sense
Automation typically pays off when:
- The task is done at least weekly
- The process is repetitive and rule-based
- Errors in the manual process cost you money
- You can clearly define the inputs and outputs
When It Doesn't
Skip automation when:
- The task requires judgment calls every time
- It's done infrequently (less than monthly)
- The process changes constantly
- The build cost exceeds 1-2 years of savings
Beyond Time Savings
Some benefits are harder to quantify but still real:
- Error reduction — Humans make mistakes on repetitive tasks. Automations don't (once set up correctly).
- Faster response times — Automated follow-ups happen instantly, not when someone remembers.
- Employee satisfaction — People prefer meaningful work to data entry.
- Scalability — Automations handle 10x volume without hiring.
Start With the Obvious Wins
Don't automate everything at once. Find your biggest time sink, automate that, see the ROI, then move to the next one. The wins compound.
If you'd like help identifying automation opportunities in your business, let's talk. We'll help you do the math before you spend anything.