14 - MEASURING SUCCESS IN BUSINESS - Coggle Diagram
14 - MEASURING SUCCESS IN BUSINESS
Measures of success
Growth is measured through increased revenue and market share. A company can grow in several ways:
• Launching new products.
• Opening new stores.
• Acquiring or merging with another company.
• Increasing production capacity.
The success of a company could be measured through:
• Customer satisfaction - how happy customers are with the product they receive and their interactions with the company.
• Owner satisfaction - how happy the principal shareholders are in the company's performance.
• Employee satisfaction - how happy employees are when working for their employer.
This is an amount-generated guide. If this increases ech year, most businesses would feel successful. However, also need to consider: sales objectives, trading conditions and revenue received by rivals.
This method of measuring success is most likely used by every business type except for start-ups, public co operations, partnerships and sole-traders. Generally setting objectives on revenue makes it easier to measure success.
Most businesses aim to make this, therefore raising profits usually means improving success.
However, also need to consider: the amount of competition, size of business, comparisons with competitors in the same industry and the objectives of owners.
Rather than focus on revenue, a company may look at profitability to gauge success.
This is because considering revenues ignores considering costs. Profit considers both revenue and costs. It measures how much money shareholders take home.