PERTINENT INFORMATION LTD. A center for information to help businesses grow faster "Giving You Valued Information"   Azriela Jaffe: Author, speaker, coach, the nation's expert on entrepreneurial couples. Return on Investment © 1998

The old saying has it that year seven often makes or breaks a marriage. For small businesses, it's usually year two or three. After a couple of years of grueling effort, if there is little cash to show for all that hard work, an entrepreneur - or his or her spouse - will often question the return on investment and think about getting a job. When I was getting my masters in business, our finance classes taught us that terms like "return on investment" were cut-and-dried formulas. Enter a few numbers into a calculator and in a snap, you know whether a company is a strong, moderate, or poor return on investment. But for the self-employed, return on investment is not nearly as clear-cut, and it shouldn't be. It's short-sighted to measure small business success by financial profit alone. We invest our emotional energy and time as well as our dollars, and we receive far more than cash in return. To evaluate whether your current business venture gives you a strong, moderate, or poor return on your investment, take the following quiz: (1) That doesn't describe me at all (2) That describes me sometimes (3) That describes me often (4) That describes me most of the time (5) That describes me almost all of the time Total Investment: 1: I invested all of our savings and went heavily into debt to launch my company. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 2: We still are scrimping personally because profit is much less than we projected at this point. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 3: I've taken on enormous responsibility, and I often dread facing it when I wake up. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 4: My spouse and/or children defer their material needs to free resources for my business, and they're starting to resent it. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 5: I'm constantly thinking about my business, even in bed at night. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 6: I've foregone other more lucrative and appealing opportunities to launch this business, and not without some regrets. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 7: I go the moon and back for my clients, but don't yet feel they notice. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 8: I'm investing so much time in my business, but it is not having the impact on my field or community that I had hoped for. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 9: I've put my business before family, even at crucial times. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time Continue to determine your Return Score. Total Return: 1: Cash flow is stable or comfortable. I am as profitable as my financial obligations require. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 2: I love my work and consider it my right livelihood. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 3: My business allows me flexibility and freedom. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 4: My time and money are giving me the best return I can achieve, personally and financially. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 5: I value the personal growth that comes from being self-employed. My business challenges me. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 6: My colleagues and customers are fascinating and enjoyable and they enrich my life. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 7: I get satisfaction from the way my product or service improves the lives of my customers. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 8: It means a lot to me to hear the gratitude my customers express. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time 9: My business makes it easier for me to balance work, family, and other interests in my life. doesn't describe me at all describes me sometimes describes me often describes me most of the time describes me almost all of the time Divide your investment score into your return score to determine your return on investment. If you scored below 1: Your return on investment is poor It's time to consider moving on to another livelihood or radically changing the way you do business. You may be profitable and still score below 1 because profitability isn't the only measure of work satisfaction. Your current business isn't fulfilling. If you scored between 1 and 3: Your return on investment is moderate. You probably enjoy your work most of the time, but your score is lowered by heavy leveraging in the launch of your business, slow gains in profit, or business troubles that weigh on your mind. If you feel as if you are in your right livelihood and making a contribution, you'll likely stick it out until profit increases, or you become accustomed to less income than you would prefer. If you scored over 3: Your return on investment is high. Even if you aren't as profitable as you would like, the satisfactions in your work compensate for unstable income. You are unlikely to close your business or move to another line of work unless an act of God or unplanned family circumstances force you to. The next time you find yourself measuring your success by the narrow financial definition of "return on investment," consider all the rewards of self-employment you before you decide to close up shop. Azriela Jaffe is the founder of "Anchored Dreams" (http:// www.isquare.com/crlink.htm), and author of "Honey, I Want to Start my Own Business, A Planning Guide for Couples" ( Harper Business 1996), and "Let's Go Into Business Together, Eight Secrets for Successful Business Partnering" (Avon Books 1998). For free online newsletter for entrepreneurial couples, or for information about her syndicated column, "Advice from A-Z", email az@azriela.com. Questions and reader response can be emailed, or write to PO Box 209, Bausman, PA 17504