What Other Objectives, Besides Profit, Are Important to Businesses?

It is good for any small business to keep an eye on the bottom line, but profit is not the only objective important to most businesses. In the 1970s, there was a shift from stockholder-based business culture to one that was stakeholder-based. Though the stockholder holds a special place in a business’s heart, especially if the small-business owner is the only stockholder, he is not the only one that has a stake in the success of the company.

Whether you are your only employee or you have dozens on your payroll, the welfare of the people who work for your business is important. The happiness of employees is an objective that no business owner can ignore. Full-time employees spend at least one-third of their day at work, and most social interactions happen though work. A 2010 study by Daniel Sgroi of the University of Warwick showed that a happy employee will make fewer mistakes and that happy employees are more likely to contribute intangible benefits, such as new product concepts and procedural ideas.

You can make a case that every business objective goes back to profit. While customer satisfaction has a direct link to sales and profit, positive customer satisfaction also increases brand loyalty and brand recognition. You want your customers to be happy buying from your shop or using your services, because that means they will come back. It also means they will tell others about you. Having a customer telling people that he has been using your services for 10 years is a good form of marketing.

Vendor relations is one of the objectives that small-business owners sometimes forget. Vendors have a large stake in the success of your business. If your business fails then the vendor loses a customer. Keeping this objective in mind allows you to direct your vendors in such a way that there is mutual benefit. Promote their business and remind them to promote yours.

As part of the swing from stockholder to stakeholder, concepts of social responsibility came into play. One of the underlying reasons people want to be successful is because they want to leave a legacy. Creating a socially responsible and community-beneficial business is one of the ways to make your mark on the world. Though it may seem like an empty feel-good moral, societal marketing researchers including Steve Hoeffler and Kevin Lane Keller have found that maintaining a solid objective of community well-being can benefit a business more than almost any other marketing technique.