What is a Stakeholder?

A stakeholder is any individual, group, or organization that has an interest in or is affected by a business’s decisions, actions, or performance. Stakeholders can be internal, such as employees and owners, or external, such as customers, suppliers, investors, and even the local community. Businesses must balance the needs and expectations of various stakeholders to operate successfully.

Think of stakeholders as anyone who cares about what your business does. Your employees rely on you for jobs, your customers expect good service, your suppliers depend on you for orders, and investors want to see a return on their money. Even your neighbors or local government might have a stake in how you operate. The decisions you make—whether it’s pricing, hiring, or expansion—can impact all these different groups. Understanding who your stakeholders are and what they need helps you make smarter business choices and build stronger relationships.

For small businesses, paying attention to stakeholders isn’t just a corporate buzzword—it’s essential for long-term success. Keeping customers happy, maintaining good relationships with employees, and working well with suppliers are all forms of stakeholder management. If you ignore key stakeholders, you risk losing customers, experiencing employee turnover, or damaging your reputation. That said, small businesses don’t need complex stakeholder management strategies. Just identifying who is most important to your success and keeping communication open can go a long way.

• Stakeholders are just investors. While investors are stakeholders, so are employees, customers, and suppliers—anyone who has a vested interest in your business.
• Small businesses don’t have stakeholders. Every business, no matter the size, has stakeholders. Even a one-person operation impacts customers, vendors, and the local community.
• Stakeholders always want the same things. Different stakeholders often have conflicting interests. What’s best for employees (higher wages) might not align with what investors want (higher profits), so balancing priorities is key.