You can take look at increasing inome, increasing employment and sustainability of employment

I would take into consideration to use profitability normalised for each industry. You would be objective and you would take into consideration variation across different industries. I didn't understand your point on currencies. If you use relative measure (% of profits on revenues or EBIT or EBT) you will not have any currency problem. But maybe I misunderstood. Best, Guido

This is a difficult one for me because success might be defined in vastly different ways, depending on the size of the business, country, and its mission and purpose. SMEs place emphasis on socio-cultural attributions such as family value, goals, and motivation to get into and stay in business (Toledo-Lopez et al (2010), while Santos-Requejo and Gonzalez-Benito (2000) defined success in terms of economic performance. I am definitely interested to read what others have to say on this.

Ruth

Ref:

Santos-Requejo, L., & Gonzalez-Benito, O. (2000). Economic success factors in spanish small retail businesses. an analysis based on sector-relative definitions. Small Business Economics, 15(3), 209-222.

Toledo-López, A., Díaz-Pichardo, R., Jiménez-Castañeda, J. C., & Sánchez-Medina, P. S. (2012). Defining success in subsistence businesses. Journal of Business Research, 65(12), 1658-1664. doi:http://dx.doi.10.1016/j.jbusres.2012.02.006

Yes, I will need to consider all these points. I hoped for an objective standard measurement proposed in any research.  I may need to use the above advice and create one.

Success would be defined in terms of the original goals for setting up the venture: were those goals purely economic, related to the venture team, to the local customer, or to the firm's long term strategic goals? Success would be defined as a combination of these factors, depending on the original intent in setting up the venture. 

You may like to go through: Pelled, L. H., Eisenhardt, K. M., & Xin, K. R. (1999), ‘Exploring the Black Box: An Analysis of Work Group Diversity, Conflict, and Performance,’ Administrative Science Quarterly, 44, 1-28.

You may be intersted to the enclosed article of mine. Regards, MV

Others have already made the point that success is not 'standardized'.  For some entrepreneurs financial success and growth is the aim, but for 'lifestyle' entrepreneurs success will be measured by satisfaction - i.e. someone may have 'always wanted' to run a flower shop, or a dog-grooming parlor, or an artisinal cheese maker, and now they do.  In such cases growth and wealth generation is less important than 'happiness' or job satisfaction.

similarly, many small entrepreneurs go 'self employed' for control - i.e doing electrical contracting or maybe plumbing themselves rather than working for someone else...

Not everyone wants to be the next Bill Gates...

Hi,

Define "success" is not easy matter  indeed. Maybe this article will help.

Success in IT projects: A matter of definition? G. Thomas, W. Fernandez, International Journal of Project Management Volume 26, Issue 7, October 2008, Pages 733–742

greet.

Great question for research nowadays!

Why not try maturity instead of amplitude of earnings? 

Maybe this video is fun and gives some answers in terms of adapting to the success stories of the XYZ generations rather than past ones?

https://www.youtube.com/watch?v=uhkKiVN3fEw&list=UUYBQQU7VCu8M6djxI4dvpIg 

Is successful any business that disappears overnight? Maybe yes, maybe no?

BR,

Simona

Dear Brock,

 Ucbasaran et al. (2009) defines innovativeness as wealth creating potential. Longevity, other concept which measures success, may not  coincide with  innovativeness. problem of defining success surfaces, because of its subjectivity. 

there are no shortcuts to overcome subjectivity other than defining success with respect to the context. In other words, success of entrepreneurship is contextual and attempts defining success in absolute terms, according scholars, may be a unsuccessful venture.

Upananda Sri Lanka

We usually use the following criteria whether it is a start-up business or a established small business: An increase in their turnover, profits, number of employees and return on investment after 12 months. As well as a decrease in their cost on a month to month basis. Regards

The main goal of all businesses is to make money, therefore the financial achievement should be considered as one of the success factor . As every product/service has the cycle life time, the sustainability/growth and innovation to challenge the maturity/obsolete/changes in technology,economic,demographic, regulatory,natural trends,etc , that will affect your market, should be considered as the second success factor. There after, the entrepreneur dream - what drive your team ?  what's your mission ,e.g. to serve market , to change the world , etc ; what's  your aspiration ;  work for yourself, build big or small business , to manage or to lead,etc. Of course, entrepreneur dream could evolve from time to time that will make it become subjective, but still ,once entrepreneur state his/their mission ,you can used it as the third success factor. Regards

Dear Jurie,

Your answer is biased and suited for accountants and not for entrepreneurship scholars. for example as a result of tax cuts factors you mentioned could be achieved without any intervention of entrepreneurship?

Upananda

The following quote on the "success of startups" is from my recent paper:

Swamidass, P. M., ENGINEERS AND SCIENTISTS: VALUE CREATORS IN THE SEVEN-PHASED MODEL OF TECHNOLOGICAL INNOVATION, Technology & Innovation, the Jouranl of the National Academy of Inventors 12/2014; 16(3-4):223-232. DOI: 10.3727/194982414X14138187301650 (copy accessible in Researchgate)

"First, Figure 1 represents a successful business from Phase 1 to Phase 7; only a small percentage of new startups are successful as depicted in Figure 1. In very simple terms, failure of a startup company is said to have occurred when the company fails to make strong positive cash flow wherin total revenue exceeds all costs by a good margin. Such a failure could be due to a number of reasons but the foremost being not enough customers to purchase the product or service at a price that would produce a positive cash flow. 

The rate of failure among startup companies may range from 30% to 95% depending on

the metric used. A study by Shikhar Ghosh, Harvard University, reports, “If failure means liquidating all assets, with investors losing all their money, an estimated 30% to 40% of high potential U.S. startups fail…If failure is defined as failing to see the projected return on investment…then more than 95% of startups fail…” (Gage, 2012) Additionally, the article notes, “Of all companies, about 60% of startups survive to age three and roughly 35% survive to age 10….” 

I have been studying this topic for several years now.  I was originally hoping for a standard used in research, but it seems that context (field/intent) does change the definition. I have been soaking in all your feedback. I went back and reviewed the purpose of our research, which is to determine how we can encourage more entrepreneurial success for improved economic development outcomes (for the region). The measure should not depend on industry and context.

Based on this and my other research, successful businesses (for this purpose) would be defined by these parameters:

- no simple rent seekers or franchisees

- ambitious (vs. necessity)

- established (3 years+)

- growth and profitability (financial measures can vary, but need to be positive)

Thank you all.

Success needs to be judged against objectives and goals of the venture.

I do feel that "success" is subjective as long as entrepreneurial firm is surviving. The subjectivity is set by the context and the entrepreneur. Instead of "Success" I used "entrepreneurs satisfaction" as a proxy measure. Financial measures are post facto, where as in entrepreneurial organizations the success measures need to be ex-ante.  

As academics we always want to get philosophical about these kind of things. Be pragmatic. Entrepreneurial success means sustainable profits based on a higher level of sales than cost measured after a certain period (24 months). I agree with Paul, enough customers, in the right market segment where the entrepreneur satisfy a need and they will succeed. If you then use the criteria I posted earlier you can define success.

The success of entrepreneurship can be gauged by how much rule-creating or rule- changing is involved. By this measure, some early pioneers in Internet search (e.g. Netscape) were successful entrepreneurial ventures, in spite of the fact that Google retains the crown having fulfilled the GEM, innovation and scale criteria. These early pioneers affected a path dependence and set in motion the increasing returns needed to allow the current slew of search engine businesses to flourish.

Success in Entrepreneurship has different measures for different entrepreneur. Some may be satisfied with a me too business while the other may want to disrupt the industry. The success should be measured w.r.t the objective of the entrepreneur.

I totally agree.

I found this measure of new venture performance totally apt:

(1) This venture generally meets (or met) the expectations of the parent corporation. (2) The parent corporation views (or viewed) this venture as being successful, overall. (3) The parent corporation believes (or believed) that this venture achieved its key milestones (i.e., events crucial to the venture's successful development) on schedule for each stage of its development. (4) This venture is performing (or performed) well in terms of the criteria (e.g., financial returns, market share, learning/acquisition of new knowledge) the parent corporation considers (or considered) important to the venture's success.

(Covin, J. G., Garrett, R. P., Kuratko, D. F. & Shepherd, D. A. (2015). Value proposition evolution and the performance of internal corporate ventures. Journal of Business Venturing. Vol. 30. 749-774.)

If it is a stand-alone firm, and not a corporate venture, I would just substitute "owners-investors" instead of "parent corporation".