measuring success

• Revenue


  The amount of revenue generated by a business is a guide to its success
• Market share


  Some businesses aim to increase their market share each year. It is better for a business to have a larger market share than a smaller one
• Measuring market share might be challenging as it needs to reflect the market context
• Customer satisfaction


  Many businesses will look at how consumers' needs and wants have been satisfied when measuring success
• Businesses monitor customer complaints and use customer surveys to gather information about customer satisfaction
• Profit


  Most private sector businesses aim to make a profit. Rising profit should signal improving success
• Profit should be compared with that made by other businesses in the same industry to provide a better measure of success
• Growth


  Many businesses aim to grow, therefore the size of the business is important when measuring success
• Ways of measuring business size


  • Turnover or revenue
  • Number of employees
  • Market share
  • Amount of capital employed
• Businesses can suffer from overtrading, which means they run out of resources trying to meet rapidly rising orders
• Large businesses are more likely to survive difficult trading conditions than smaller businesses due to having more resources
• Employee satisfaction


  Employees want the business to be successful as they depend on it for their livelihood. Their needs include higher wages, more benefits, job security, good working conditions, opportunities for training and promotion, and fair treatment
• Making a business more profitable may not always mean success from an employee's perspective, e.g. if workers are made redundant to cut costs
• Objectives/Targets


  Businesses set objectives/targets to measure success, e.g. growing market share by 5%. Targets can be adjusted to take into account current business circumstances
• Large businesses are usually measured by profits and growth, while smaller firms may have different objectives like personal satisfaction