Stakeholder and their Impact on the Success of a Small Business

Every business, regardless of its size, has a management structure. Even the proprietors subcontract their work and manage their subcontractors. Whether a person is an owner, employee, or even the manager, everybody in the organisation has an individual role in the success and failure of the business. Sometimes, employees and managers can have a dramatic effect on the growth of the business. Moreover, the influence of the stakeholders has increased the chances of the company acting as a community, covering the social responsibilities and integrating the business management.

Customers, employees, business partners, and the communities are the critical key stakeholders of the group that carries decision and activities of what happens within the company. Understanding the negative and positive effects of the stakeholders on any company is equally important for any small business.

The success of any small business depends on the actions that the stakeholders. The stakeholders affect the business so significantly that it counts in the ethical responsibilities of the company. A mutually beneficial relationship of the stakeholders with the small businesses further generates the goodwill of the company. This further leads to long-lasting success.

How do stakeholders change the behaviour of the company?

There exist different stakeholders in a business at different times. To understand this, let's take the example of two categories of businesses. Let's name the first business, Business A, and the second business, Business B, where both work in the direction of how to grow your business.

In business A, the owner would eventually sit and relax. He would ask the manager to explain the work and schedule that is not compromised of the benefits of the staff or the employees. Here, the manager should create a work schedule that would direct in creating benefits for the business and where the strong incentives for the employees are not in place.

While in business B, the owner has incentivised the manager as he had created the efficient work details, and here the manager acts as the stakeholder. It is, thus, important for any small-scale business to decide whether who will pay the role of being the stakeholder.

It will widen the base of the company and would help the company to have effective growth. And in case the business exceeds its expectations, it will directly motivate the little expectations of the staff members and help generate small business tips. Here the employees are the key generators for the company. It will further lead to cost-cutting suggestions from the side of the staff itself, and the managers and new fabulous ideas will explore the benefits for the company.

Types of stakeholders in a business

1. Customers as stakeholders

Customers act as a primary source for any company-whether small or big. They depend on the supply, products, and services of the company. They support the company while becoming one of the essential business growth tips. They make the purchases and show the company what and how to invest in the products and services. They further decide the immediate demands as to how to grow a business or how to expand the business.

Customers help the business in guiding the directions. They share their opinions and experiences with the company and serve better while directing their requests. Customers often speak with the company in directing how the products and services should be selling so that only profits may occur. And because the customers are directly linked to what happens within the company, it creates opportunities for small-scale businesses to understand what changes they need to make and what their customers need.

2. Dependency of employees on the companies

In a small-scale business, employees depend on the companies for their livelihood. Contracts derive a large part of their incomes from the business. Their work daily helps to create success in the company. Thus, a small-scale business might train its employees to improve the skills and prepare for the things that will help the company succeed.

They are essential in creating business tips for any business. They help to maintain the productivity, positive attitude, and environment within the company while developing the strength of cooperation within all the employees. And even if it is a small-scale business, owners work alone who is likely to depend primarily on friends and families, local markets, and the websites to fulfil the same functions as what an employee does. Employees can also be the examples of stakeholders in a business because they boost the income and the role of payment within the company.

3. Suppliers as stakeholders

Suppliers provide materials and components for the company that are further used to create the products. In certain cases, suppliers provide the finished products, and the business may depend on the particular supplier who generates the superior raw products and good qualitative materials for the company. These superior raw materials are further used to highlight the company's superiority or help to decide the company's status within the marketplace.

A small business with a narrow niche depends on the specialised products from the side of the suppliers. This further increases the risk to the company as they get fully dependent on the stakeholders. And in case the company cannot purchase the supplies, they dramatically adapt the offering of the stakeholders. Suppliers, thus, come as a secondary source to decide how to grow my business in case you are looking for growth.

4. Community and Government as a Stakeholder

The government collects all the taxes from the company. It doesn't matter to them whether the business is small or big. It benefits from the profit of the company. A small-scale business grows and affects the community with positive or negative effects. A business may provide jobs to the employees and contribute to the funds to any other organisation. Even a small-scale business helps to give back the support to improve the community as a whole.

A company becomes socially responsible that further helps to develop the environment within the community itself. It decides the nature of the community in a broader sense and, on a broader sense, the world. A small-scale business may decide the practices on behalf of the citizens and the environment, acting as the stakeholders. And when the company's environment affects the community, it creates an ecotourism venture that is ethically responsible for improving the community groups and the planning or activities of the company.

A stakeholder is defined as the person who is interested in something that especially happens within the company. By having the financial interest, a stakeholder may begin to create profitable decisions for the company and the entity of the success.

Conclusion

At the end of the year, bonuses and business stocks are used instead of cash for the employees, creating a suitable environment within the company as a whole. On a small basis, businesses have a few profits the whole month, which they provide to their key managers to achieve the specific targets. And on the other hand, the managers embrace the business and work to make the company's status better every day. Bonuses and small profitable funds help the managers create the business reputations and get the problems sorted and ready to develop the targeted audiences.

Also read:

1) Best Tips for Customer Retention for a Small Business
2) Tips to Understand Your Market while Starting a Small Business
3) Tips for Businesses to Overcome the Covid Blues - Revival Tips for Businesses
4) What are the keys to success when operating a small scale business?
5) OkCredit: All you need to know about OkCredit & how it works.

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FAQs

Q. How do the customers act as stakeholders to any small-scale business?

Ans. In a small-scale business, employees are dependent on the work for their livelihood. They work, and in return, their performance helps maintain the company's connectivity with the marketplace. They decide whether to prepare for the things that will help the company to grow. Moreover, they act as long-tail sources for any small-scale business for which its primary benefit is its human power.

Q. What is the stakeholder, and how does the community become an important member of any business?

Ans. A stakeholder is a person who is interested in a company from a profit point of view. A stakeholder directly or indirectly decides the nature of the company. Employees, customers, business partners, and communities choose the key factors that affect the small-scale business in a broader sense. And businesses support the community to improve the community as a whole. Businesses determine the nature of the community, and the community decides the environment within the office or the business.

Q. How does the supplier hold the company with their raw materials?

Ans. Suppliers provide raw materials to the company that is further used to create the finished products. And if in case the supplier provides the finished products to the company becomes dependent on that particular supplier. Then, the advancement of the supplier holds the profitability of the company.