A business case can be unattractive to one party and highly valuable to another. A training program may cost the business that funds it while most of the benefit goes to the workers and the industry. A customer may pay a premium for trust, identity or community rather than pure function. An employee may value flexibility more than a small pay rise. A community may gain from a local facility that earns its owner only a modest return. And an owner may keep running an activity because it matters to them personally, not because it is the most profitable use of their time.
These situations complicate investment decisions, but they do not make them arbitrary. They require clarity about whose value is being measured, what form it takes, who pays for it and whether the party funding the investment can capture or justify the benefit.
This article explains how to think about value that is not purely financial, why the perspective of the analysis changes the answer, how to handle impacts that are hard or inappropriate to put a dollar figure on, and how to avoid the opposite error of using “intangible benefits” to excuse weak economics.
What the research shows
Three different strands of research illustrate the point.
A 2020 study by Christopher Huth of supporters investing in financial instruments issued by European football clubs, based on 760 completed questionnaires, found that attachment to the club strongly influenced investment, and that some supporters expected an emotional return to compensate for their financial outlay. It is a specific finding in a specific setting, but it shows that people’s sense of value can include identity, belonging and purpose.
A 2020 systematic review by Davison and colleagues of health-focused housing programs found that the calculated return on investment depended heavily on which costs and benefits were included and from whose perspective they were counted. Narrow analyses and broader social cost-benefit analyses produced different pictures of the same program.
Transport and infrastructure appraisal methods in Australia have long assessed some effects by who is affected, how long the effect lasts, whether it can be reversed or mitigated and how significant the remaining effect is, rather than converting everything into dollars.
Together, they support one idea: value has many dimensions, but it still needs disciplined boundaries.
Common misreadings
- Value equals revenue. Revenue is the value the business captures, not the total value it creates. A service can create substantial value for customers or communities while its provider captures little. A profitable activity can impose costs on others outside the financial model.
- Non-financial value cannot be managed. When a benefit is hard to put a figure on, businesses tend either to ignore it or to invent a dollar value that looks precise but is not. Both are weak responses.
- All benefits can be added together. A proposal may claim savings, community benefit and revenue in one total, even though each goes to a different party and is measured differently.
- Only financially rational behaviour is credible. Attachment, trust and identity genuinely influence what customers, employees and investors do.
- Intangible benefits justify anything. A project does not become sound because it has benefits that are hard to measure. Non-financial value still needs evidence and trade-offs.
Map value, beneficiary, payer and capture
For decisions with several parties, build a simple value map with four elements:
- Type of value: financial, strategic, social, environmental, emotional, capability or other.
- Beneficiary: owners, customers, employees, community, government, partners or others.
- Payer: who provides the money, bears the running costs or accepts the risk.
- Capture: how the funding party receives or justifies the benefit, for example through price, customer retention, lower staff turnover, reputation, a grant or its own mission.
Capture is the critical element. A business can create value for customers and capture it through price or loyalty. A community organisation may justify value through its mission. A business funding staff training may capture value through productivity and retention. Where no capture mechanism exists, a valuable investment may still be hard for the payer to justify.
Perspective changes the answer
When one party pays and another benefits, an investment can be worthwhile overall and unattractive to the payer. The same problem appears inside businesses. One department funds a data clean-up while another gains the productivity. Maintenance spends money to protect revenue owned by production. A safety improvement reduces risk across the business without creating a visible return for the team that paid.
Good investment decisions align funding with benefit where possible. That might mean sharing costs between departments, sharing savings with a customer or supplier, seeking co-funding from those who benefit or simply making the cross-subsidy explicit and deciding it is worth it.
Emotional value is real, and needs governance
The football club research is useful because it challenges the assumption that everyone pursues the same financial objectives. People’s choices can include identity, belonging, mission and participation. A strong brand may command loyalty that price comparisons cannot explain. A community business may attract support because people identify with its purpose. An owner may value independence, craftsmanship or local employment.
That value is real, and it can matter commercially. But it should not be romanticised. Emotional attachment can also increase tolerance for poor performance and discourage healthy challenge. The same attachment that creates support can lead to over-investment or resistance to necessary change. That is why emotional value belongs inside decisions, stated openly, rather than outside them.
The owner’s own returns
In small businesses, the owner is often both the investor and the main decision-maker, and their goals rarely stop at financial return. Independence, control over their time, pride in craftsmanship, providing local jobs, building something to pass on, or simply enjoying the work are legitimate returns. They shape decisions about growth, pricing, which customers to serve and when to sell.
These personal returns are best made explicit. An owner who knows they value independence over maximum growth can choose funding and partners accordingly. One who values a particular activity for personal reasons can keep it while understanding what it costs. Problems arise when personal preferences are presented as business logic, or when the business’s financial health is quietly sacrificed for them. Writing down what the owner wants from the business, and reviewing it every year or two, makes these trade-offs visible to the owner, their family, their staff and their advisers.
Share value with those who benefit
Where an investment creates value for partners, customers or suppliers as well as the business, there may be ways to share the cost. Examples include joint funding of a shared training program with other local businesses, a customer contributing to tooling or equipment that serves its orders, a supplier sharing the cost of a process improvement that reduces its own waste, or industry associations pooling resources for common needs. Such arrangements need clear agreements about contributions, ownership and what happens if a party leaves, but they can turn an investment that is marginal for one party into one that is clearly worthwhile for all.
Some impacts need significance, not dollars
For effects such as safety, environment, heritage, community wellbeing or culture, converting everything into dollars can be contentious or misleading. An alternative is to assess significance using explicit criteria:
- Who is affected, and how many.
- How long the effect lasts.
- Whether it can be reversed.
- Whether it can be mitigated.
- How significant the remaining effect is.
This avoids two extremes: forcing every impact into a financial figure, and leaving qualitative claims vague and unranked.
A four-ledger view
For decisions affecting several parties, consider four ledgers side by side:
| Ledger | Question |
|---|---|
| Business economics | What cash flow, cost, return and risk come to the business? |
| Strategic capability | What capability, option, resilience or position is created that cash flow may not fully show? |
| Stakeholder outcomes | Who experiences benefits or harms, and how will they be measured? |
| External effects and obligations | What environmental, social, regulatory, safety or community effects sit outside the financial exchange? |
For each ledger, define the evidence, the owner and the time horizon. Avoid collapsing them into a single score unless the weighting is transparent and agreed.
A worked example
This is an illustration. A regional food manufacturer with 30 staff is considering a $120,000 investment in a structured apprenticeship and training program with a local technical college. On the business’s own figures, the investment looks marginal: training costs and supervisor time are certain, while productivity gains are uncertain and some trained staff may leave.
The owner builds a value map:
- Business economics: reduced reliance on scarce external recruits, lower overtime once trainees are productive and lower turnover among staff who value development. Estimated net financial benefit over five years: slightly positive, with wide uncertainty.
- Strategic capability: a pipeline of maintenance and production skills that are hard to hire in the region.
- Stakeholder outcomes: apprentices gain qualifications and local career paths. Existing staff value the chance to mentor and progress.
- External effects: the college gains an industry partner, and the local community retains young people who might otherwise leave.
Some of the benefit flows to apprentices and the community rather than the business. The owner looks for capture mechanisms: available government apprenticeship incentives, a retention arrangement where completed apprentices commit to a period of employment, and use of the program in recruitment and customer marketing. With these, the business case becomes clearly positive, and the remaining community benefit is recognised as a deliberate choice rather than a hidden subsidy.
How this applies to a small Australian business
Small businesses often make decisions shaped by values beyond profit: supporting local suppliers, keeping long-serving staff, sponsoring community clubs, choosing quality materials. Practical steps:
- State whose value each claimed benefit belongs to.
- Look for capture mechanisms, such as pricing, retention, co-funding or grants.
- Be honest about emotional value, both its benefits and its risks.
- Assess hard-to-measure impacts with clear criteria rather than invented numbers.
- Align funding with benefit between departments, partners or customers where possible.
- Check available programs: government incentives for apprenticeships, energy efficiency and other activities change over time, so check official sources and ask your accountant.
The articles on choosing your decision measures before the design and customers are more than revenue cover related ideas.
Signals worth watching
- Proposals claiming social or strategic value without naming who benefits or how it will be measured.
- One part of the business paying for benefits captured elsewhere, with nobody resolving it.
- Intangible benefits given arbitrary dollar values to make a case work.
- Attachment to an activity being treated as permission to ignore its economics.
- Harms to others left out because they fall outside the budget.
Common mistakes
- Equating value with revenue.
- Ignoring benefits because they are hard to measure.
- Inventing precise figures for uncertain benefits.
- Adding benefits together that belong to different parties.
- Using intangible value to excuse weak economics.
- Leaving funding and benefit misaligned.
Frequently asked questions
Should we invest in things that do not pay back financially? Sometimes, if the value matters to the business’s purpose, owners or community and the cost is affordable. Make that choice openly, rather than disguising it as a financial case.
How do we measure emotional or social value? Use simple, honest indicators: customer retention and referrals, staff turnover and engagement, community feedback, participation. Avoid converting them to dollars unless there is a sound basis.
What if a partner benefits more than we do from a shared investment? Discuss sharing costs or benefits. If that is not possible, decide whether the value you receive justifies the investment on its own.
How do we explain non-financial decisions to a bank or investor? Present the financial case honestly, show separately the strategic and stakeholder value you expect, and explain how the business can afford the choice. Lenders and investors generally respond better to clarity than to inflated numbers.
Can non-financial value help win customers? Often. Trust, reputation and community connection influence buying decisions, particularly for small businesses competing with larger ones. Claims must be accurate and supportable.
How do we stop non-financial value becoming an excuse for any spending? Set the same discipline you would for a financial case. Write down what the investment is meant to achieve, how you will tell whether it has, what it costs and when you will review it. Agree a limit on how much the business will spend for value that does not pay back in money. If the stated benefit does not appear by the review, treat it like any other investment that has not delivered and decide whether to continue, change or stop.
Questions to ask
- Whose value are we measuring in this decision?
- Which benefits go to someone other than the party paying?
- How will we capture or justify the benefits we are counting?
- Which important outcomes are we ignoring because they are hard to measure?
- Where might we be using intangible benefits to excuse weak economics?
- What effects on others are missing from our analysis?
Bringing it together
Financial return is essential where money must earn a return, but it is not a complete account of value. Make the value boundary explicit: what form of value is created, who receives it, who pays, how it is captured and which outcomes matter to the decision. Assess hard-to-measure impacts with clear criteria, align funding with benefit, and be honest about both the strength and the risk of emotional attachment. Then non-financial value becomes something you can manage, and financial value becomes more honest about what it does and does not measure.
Source: KEVOS notes, drawing on C. Huth (2020) on supporter investment in European football clubs, G. Davison and colleagues (2020) on returns from health-focused housing interventions, and Australian transport impact assessment practice. Examples and figures in this article are illustrations. This article is general information, not financial advice.
