How does a business measure its success?
A business measures its success to see if they have achieved the aims that they set for themselves and to see what objectives they are going to set for themselves for the future. They may want to see that they are making progress and that they heading towards the aims and objectives that they have set for themselves. They may also check that they do not have any problems and if they do have any problems then they will be able to sort it out. Also they would want to look for things that they wish to improve with the way that they are running it. For example they may see by looking at it that they may want to improve the way that they dispose of waste and they will be able to look and evaluate this when they measure the success and then improve the way that it is done to the way that they would like it to be done.
The way that they will measure the success of the business may be through looking at the financial records of the business to see if they have a made a profit. They may look at productivity figures for the business and see if they have become more productive, and if they have become more productive then this will show them a sign of success and that they have achieved targets as they will have increased productivity and this will meant that they are more efficient and will have lower costs of running the business.
They may take a measure of success to see if they can identify any problems that they may have involving certain aspects of the business. For example they may have problems relating to the amount of staff turnover. They may see that is costing them huge amounts of money in recruiting staff and this may be a problem. They then can identify this and work on different ways of improving this through ways such as incentives to stay such as better conditions at work and free soup at lunchtime to help reduce staff turnover and therefore increase efficiency
A lot of the measurements that they will take will be linked to the targets that they have set for themselves before. They will evaluate their success and productivity by looking at certain things as a measure of how successful they are doing. For example they may look at the turnover of staff to see if their amount of staff turnover is a high amount or a low amount. This will give them an insight into the efficiency of staff hire and the cost of staff training.
They may wish to check their profits for the purpose of checking their financial position and to see if they are meeting the objectives that are being set by them by Montagu private equity so that they can see that they are meeting the aims that are being set so that the shareholders will be happy so they can continue to receive help from Montagu. They will need to check their gross and net profits. Gross profits are all of the profits before tax and net profits are the profits after tax so net profit is the important one as it shows the actual profits they receive.
They may want to see if they have established a brand image. They would want to do this so that if they had a brand image then people would be more likely to buy their products and they would be able to charge more because people will still want to buy the product if the see it as a brand. They may want to establish a brand image and see if they have to see if they can compete with their rivals in the health food market.
They may wish to check to see if they are reaching the customers that they are trying to reach and if the advertising that they are using is successful. They may do this by asking people questionnaires to see how they responded to their advertising and if they were successful in the way that they put the message across and if it appealed to them. They could ask them if they considered buying the product after seeing advertisements and if they say that they would then they know that the campaign was successful, as it has made people buy the item for consumption.