Why return on investment (ROI) matters to a first-time founder
Every euro you spend competes with every other use of that euro. Without a return figure, you repeat spends because they feel productive, and you cannot tell the tool that paid for itself from the campaign that lost money. Working it out forces you to name the gain in euros, count only profit or savings rather than sales, and compare options on the same basis before committing more cash.
Examples of return on investment (ROI)
You spend €200 on a tool that saves €500 of contractor time this year. The benefit after the spend is €300. Divide €300 by the €200 you put in, and the return is 150%. You can compare that with a different €200 you might have spent on ads, if you count those ads the same way.
Common misunderstanding
People calculate it on revenue. A €200 ad that brings €500 of sales looks like a 150% return, until serving those sales costs €450. The real result is a €150 loss, which is a negative return. Customer acquisition cost asks what you spent to win a customer. This asks what you got back from a particular spend. They meet in the middle, and they are not the same question.
When to use it
Use it before you repeat a spend, and when you are choosing between two uses of the same money. If you cannot name the return in euros, you do not have a return yet. You have a hope.