Risk and Reward
Business success
Business success is a reward: it is the positive outcome an entrepreneur hopes to gain from accepting risk, such as achieving the aims they set for the venture, and the reason they are willing to put money, time and effort into it. Success is subjective, which means it depends on what each owner values, so two businesses can look very different and both still be successful.
Ways owners measure success
| Measure | What it tells the owner |
|---|---|
| Survival | The business is still trading after a difficult first year, which many owners treat as the first real win. |
| Growth | More customers, extra staff or a second set of premises show the business is expanding. |
| Profit | The money left after costs can give the owner an income and funds for reinvestment. |
| Customer satisfaction | Repeat orders and good reviews show that people value what is sold. |
| Reputation | Being known for quality or fair dealing builds trust and brings in custom by word of mouth. |
| Personal goals | Flexible hours, working near home or improving the local area can matter more than money to some owners. |
Why the difference matters
An owner who cares only about profit might call a quiet year a failure, while an owner who wanted more control over their time might call the same year a success because it paid the bills and let them choose their own hours. Neither view is wrong, because success is judged against the goals the owner set.
For example, Marek runs a one-van gardening round. He could earn more by taking on staff and advertising widely, but he wants to finish early enough to collect his children from school. The business makes a modest profit, yet for Marek it is successful because it fits around his family. His neighbour, who runs a mobile dog-grooming service, measures success differently: for her the reward is the day she can afford a second van and an employee, so growth matters more than short hours.
This is why a business with a modest profit that gives its owner control over their working day can still be counted as a success.
Practise this
Edexcel GCSE Business · 1.1.2 Risk and Reward