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Learning objective

Explain why business success can be measured by more than profit.

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Topic

Setting business aims and objectives

Subtopic

Changing objectives and success measures

Aqa Gcse BusinessBusiness in the real world

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Quick explanation

Explain why business success can be measured by more than profit

  • This point belongs to Setting business aims and objectives, especially Changing objectives and success measures.
  • You need to be able to explain why business success can be measured by more than profit.
  • The key ideas to know are business, success, and more.
  • Use the linked flashcards and practice questions to check recall, then practise applying the idea in an exam-style answer.

Key concepts

businesssuccessmoremeasuredthan

Why it matters

This objective helps connect Changing objectives and success measures to exam-style questions, flashcards, and revision notes for Setting business aims and objectives.

Quick student answer

Explain how an online service business can use customer churn rate as a success measure.

Direct answer

Customer churn rate shows the proportion of customers who leave over a period. A lower churn rate indicates higher retention, which leads to more repeat revenue and a stronger customer base.

How it works

Churn rate directly affects future sales and customer lifetime value; reducing churn improves profitability and market position.

Key terms

  • Return on Investment (ROI): A ratio that compares the gain or loss from an investment relative to its cost, expressed as a percentage.

Common trap

Confusing profit with cash flow: Profit is the accounting surplus after costs; cash flow is the actual movement of cash in and out, which can differ due to timing of receipts and payments.

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