Does your business have stakeholders? The answer is yes. Even if you’re just a sole trader with a simple business you still have stakeholders. What are stakeholders, and why should you care?
Welcome to the third part in a series based on the “Starting your business” course (CSB401) offered by the Open Polytechnic. I have been reviewing each module as of the course, summarising the key points, and how they apply to your business.
This module covers stakeholders, what are they, how they influence your business and how you should engage with them. Stakeholders can be either internal or external, and every business will have them.
Who are your stakeholders?
So, first of all, what are business stakeholders? Stakeholders are basically anyone who has an interest in your business, what your business is doing and how your business is performing.
Stakeholders can include:
- Customers
- Employees
- Creditors
- Government
- Competitors
One thing that was a bit of surprise to me, is that competitors are actually stakeholders in your business, but it makes sense when you think about it – how you perform obviously impacts on them as well.
If you’re a massive success then that you are a threat to them obviously you might be stealing market share from them conversely if you bring out new products or services or a new way of delivering a service then that can impact on competitors too because it quite likely creates expectations in the marketplace and their customers might be saying well there’s other businesses providing ‘x’ type of service or is doing something extra for free, why am I still paying for it?
Anyone from your local city council to your bank manager to perhaps you might be leasing a property and of course probably one of the stakeholders is obviously customers themselves.
What impact do stakeholders have on your business?
Customers will have a big influence and this is a key point, that each stakeholder has a range or sphere of influence on your business. Stakeholders are generally divided into internal and external stakeholders.
An example of an internal stakeholder would be employees. External stakeholders are ones outside the business, such as a competitor, or your power company.
Stakeholder influence is obviously key in terms of determining how you will engage with that stakeholder, so that’s probably one of the key takeaways from this module is that not not just that you have stakeholders, but really determining the influence and the impact of the stakeholder on your business.
Managing your stakeholders
One way to manage the stakeholders in your business is to draw up a list, a matrix of the stakeholders in your business. Plot them on a quadrant (see below) with the interest of the stakeholders, and how interested they are in your business, as well as the influence or the power they have over your business.
All of those things are important and need to be taken into account. Write up your stakeholders: who are they, are they internal or external, and then, secondly, look at how much influence they have over your business and how interested are they in your business. This will move them up and to the right, in terms of the quadrant above.
This will determine how you engage with them and the communication styles used, including what information you will release, and what information you will keep private.
Stakeholder relationships is something that needs to be maintained on an ongoing basis. For example, if you’re looking at customers you want to maintain that stakeholder relationship in different ways, such as regular customer surveys where you get feedback from customers, and you can use that information to shape your business and make changes as needed.
While business stakeholders might seem like a straightforward subject, it’s really important to make sure that not only you identify the important stakeholders, but that you engage with them in a meaningful and constructive way.
If you need help with engaging with your customers through bulk email or create customer surveys, just get in touch.