A Different Look at R.O.I.

“Dad, I want to start a business, ” my 11-year-old son said when we were asked to do a project for our black belt test. I am a big believer in the value of entrepreneurship and was happy to start teaching Lawson what I had learned, good and bad, about helping run a business or serving in leadership positions in the corporate world. 

The lessons learned from being a hobby entrepreneur are too great for a single post, but one of the most important lessons is a different way to look at R.O.I. (return on investment). My awareness increased recently during a conversation with my son about his business venture.

Due to:

• Minimal time (weekends, very early morning, or late nights)
• Minimal resources (bootstrapping for the most part)
• Having to balance all of the other aspects of life

We had to create our own definition of R.O.I. We looked at four criteria:

1. Money: what is the return that we will get from the amount of money we will need to invest?
2. Time: if we only have minimal time, which project will we spend it on?
3. Impact on others: we look at each project and consider which will have the most significant positive effect on the world around us. 
4. Fun:  how much fun will the project create? My son picked this one as his first choice when I asked him to explain the meaning of R.O.I. This might be the most important.

Is it easy to balance all four of the items above? No, very few projects will meet all criteria, so my son and I are using the old 10-point scale. We rate each project on a scale of 1 to 10 under each criteria listed above to help determine which one to pursue. This gives us a good gauge of what to do. 

Whether you own your own business, have a hobby business, or work for someone else, this way of looking at R.O.I. should prove helpful. It sure has been for me.