Decide in advance when you will judge whether this is working

Nothing arrives to tell you it is not working

An unsuccessful business rarely announces itself. It produces some income, some encouraging conversations and a steady supply of reasons why the next quarter will be better, and each of those reasons is individually plausible. A job that isn’t working out ends, eventually, because somebody else makes it end. A business that is not working out can carry on for years.

What replaces that external signal is a decision made in advance: a date, a set of things that will be true by then if this is going somewhere, and an agreement with yourself about what happens if they are not. It costs nothing to set and it is close to impossible to construct later, in the middle of a bad month, when every option feels like an admission.

Set the test while you’re calm

The point of choosing the criteria early is that you are, at that moment, the least biased you will ever be about this business. Nothing has been invested yet, no identity has attached itself to the outcome, and it is still possible to say what a disappointing result would look like without it feeling like a prediction of failure.

Twelve months in, that clarity is gone. By then the business is bound up with how you describe yourself to other people, and the question of whether it is working has become a question about you. Criteria written before that happens are a message from a more objective person, and they are worth listening to.

Revenue on its own is the wrong test

Income tells you very little in isolation, because it can be produced by unrepeatable work, by favours from people who know you, or by charging so little that the volume is meaningless. Three better questions are what an hour of your time actually earned once every hour is counted, whether enquiries are arriving from people you have never met, and whether anybody has come back a second time.

Those three between them describe whether a business exists or whether a series of favours does. A year of full weeks at a rate below what you could earn elsewhere is a signal, not a foundation, and it’s one people routinely explain away.

Trajectory matters more than level

Early figures are small and unstable, so the absolute number is a poor guide. The direction is better. Is the proportion of work arriving from strangers rising? Is the rate you can charge moving upwards? Is it taking fewer conversations to win a job than it did six months ago?

A business improving on all three is working, even if the income is still modest. A business flat on all three after a reasonable period is not a young business; it is a stable one that happens to be at a level nobody would have chosen. That distinction is exactly what the review is for.

Trajectory is also the measure least affected by the noise of a small operation. One large job can double a quarter and prove nothing, and one client going quiet can halve it and prove nothing either. Direction across several periods absorbs both of those, which is why it’s worth keeping the figures in a form that lets you look at more than one at a time.

There are three outcomes, and the middle one needs specifics

Continue, change, or stop. Continue is easy and should be reserved for cases where the evidence actually supports it. Stop is rare and generally arrives later than it should. Change is the one people choose by default, and it is only useful when the change is named precisely: a different customer, a different price, a different offering, a different way of finding work.

"Try harder" is not a change. It is a decision to run the same experiment again while feeling worse about it, and a review that concludes with it has not concluded anything.

Put it in a calendar

The review is worth almost nothing as an intention and quite a lot as an appointment. Pick a date far enough out that the business has had a fair run — for most trades that is measured in seasons rather than weeks — write down what you expect to be true by then, and seal it.

Then read it on the day, before looking at anything else. What you wrote will occasionally be embarrassing and it will always be more honest than whatever you would have said that morning.