The main types of business aims
All businesses have aims and objectives. These give a business direction and provide a purpose for what the business does each day. A business aim is the overall target or goal of the business, whereas business objectives are the steps a business needs to take to meet its overall aims. A business may have several different objectives that will help it to meet its aim.
An example of a business aim is ‘to make £120,000 ’. An example of a business objective is ‘to make £10,000 profit each month for the next year’.
Business aims and objectives fall into two main categories: financial and non-financial.
Financial aims and objectives
Financial are linked to money. Their goal is to either make sure the business can afford to keep running or help it to make a profit. An may have more than one financial aim or objective that they use to give their business direction.
Financial aims and objectives cover:
- Business survival is a very common objective for a small business or during hard economic times. Business survival refers to keeping the business operating for a certain amount of time. Most businesses initially aim to survive their first year.
- Profit maximisation refers to any money left over after all costs have been taken away from any revenue made by a business. Businesses want to make as much profit as possible.
- Sales refer to an amount of a product or service sold by a business. A business will set a target for how much it wants to sell each month and year. This gives the business a target to aim for and a purpose to what its employees do each day.
- Market share refers to the percentage of the market that a business occupies. The market is the industry that a business operates in, for example the fast food industry. An example of an objective for market share might be ‘to have 5% share of the fast food market within a 100-mile radius in the first 12 months’.
- Growth relates to businesses wanting to grow the size and scale of their operations over time.
Non-financial aims and objectives
Non-financial are linked to anything other than making money for the business. These are usually linked to personal reasons behind an setting up a business.
Non-financial aims and objectives are categorised as:
- Social objectives are linked to doing things in an ethical or environmentally friendly manner, or having a business whose sole purpose is to meet a social need.
- Environmental objectives, for example, an entrepreneur may aim to provide only products that are or use only solar energy to power their business.
- Personal satisfaction relates to an entrepreneur feeling satisfaction that they have created a successful business. It may be that an entrepreneur is able to make a business out of a hobby or personal interest.
- Challenge relates to an entrepreneur setting up a business with the intention that making it successful will challenge them or take them out of their comfort zone.
- Customer satisfaction relates to how happy customers are with the products or services they receive. Businesses want customers to be as happy as possible.
- Independence relates to an entrepreneur working for themselves and running their own business. It is also to do with them making their own key business decisions. A desire for independence is a common reason for an entrepreneur to set up a business.
