When it comes to any form of business a huge factor to look into is always going to be the rate of return. A rate of return (ROR) is the gain or loss of an investment over a certain period of time. Ideally there is an initial investment in which is typically expressed in the form of. A percentage of gain would be a positive ROR and a loss on an investment would be a negative ROR.

There is a formula which is used when calculating a rate of return (ROR) as follows.

This formula is based on gains made during the holding period of an investment and should be included in the formula. A holding period is total returns over the period for which an investment was held. This is usually expressed as a percentage from the initial Invesment. Here is an example, if a share costs $10 and its current price is $15 with a dividend of $1 paid during the period, the dividend should be included in the ROR formula. Here is an example.

(($15 + $1 - $10) / $10) x 100 = 60%

Return risk can be affected by riskier investments. For example, higher potential returns can carry a higher chance of loss. Also, inflation can destroy the purchasing power of returns. There are a lot of factors to consider when evaluating investments.

A good rate of return is what all investors are searching for and minimizing risk.

Unfortunately, risks are unavoidable in this business and the investors who are willing to do so often are rewarded with higher returns. Stocks are typically the riskiest investments and do not guarantee a company will continue to be viable. Not only is this risky for small businesses, but large corporations can fail at any point as well. Investors can lose everything in one day or be left with nothing.

On the upside there are ways to minimize risk and that would be to invest in a variety of companies. In order to do this strategically, companies from different sectors and asset classes would be ideal. For example, assuring stable values in bonds, real estate, and stocks can pay off over time. A return of 15-35% and of diversification is ideal, but not always accurate.

There is a show shark tank which allows businesses to come in front of investors with their product or service of some sort. Mark Cuban with a net worth of around $5.1 billion, according to Yahoo Finance. His big startup was when we sold his startup, "Broadcast.com" for $5.7 billion. He then purchases the Dallas Mavericks for $285 million with an investment estimated at about $3.3 billion. Since then, he has gone through hundreds of investments and startups. The reason he was able to be this successful is due to the diversity of his investments and the risk he took. The rate of return played a huge role in this and without it, he amongst many other investors would not be as successful. Rate or return overall consists of investing in indifferent places and taking risk can lead to the highest rate of success in business.