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14 - MEASURING SUCCESS IN BUSINESS - Coggle Diagram
14 - MEASURING SUCCESS IN BUSINESS
Measures of success
Growth
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.
Satisfaction
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.
Revenue
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.
Market share
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.
Profit
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.