1. What is a Successful Business?
UNIT 2.5
What is a Successful Business?

2. Measurements of Success
Different types of business will have different ways of measuring success – could be:
Achieving profits
Achieving the aims of the organisation
Survival of the business
To be independent
To improve product/service
Achieving good sales figures
Having good relationships with stakeholders
Leading the way with innovation
Achieving growth
Having a large market share
To provide employment

3. Advanced Objectives
Once an organisation has achieved some measure of success, it may have additional, advanced objectives eg:
to sustain growth
To increase market share
To have an easily-recognisable brand

4. Types of Organisation Sole Trader Partnership Private limited company
Public limited company
Charity
Co-operative
Franchise
Voluntary organisation

5. Measuring Success
This will vary depending on the type of organisation For example:
A profit-making business might use its actual value of profit and compare it with other years or other similar businesses
A charity might measure its success by the amount of aid given to its chosen cause (eg Oxfam may decide it is successful if it can provide enough aid to famine-hit areas)
A public sector organisation may measure its success on the way in which it has used its funding (eg a state-run nursery may decide it has been successful if it provides adequate care for a large number of children)

6. Stakeholders
These are the people/organisations who invest or have an interest in an organisation
Many different types of stakeholder depending on the type of organisation
For example, owners, shareholders, managers/directors, employees, debtors, creditors, customers, Government (tax and law), suppliers, local community, trade unions, EU

7. Conflicting Interests of Stakeholders
Stakeholders in an organisation have different expectations
Customers want the best prices with good quality products
Shareholders want large profits, stability of the business, increasing share value
Employees want job security and promotion prospects
Local community wants provision of jobs, clean/safe environment
Suppliers want prompt payment, regular orders

8. Shareholders :
Have an interest in how their shares are performing and therefore an interest in how the business is performing
Private limited company shareholders can be more flexible and supportive as they are usually family, employees or friends want the firm to do well in the long term
Public limited company shareholders are usually more detached from the business and are only interested in share prices and the dividends they will receive.