What are business aims and objectives
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 long-term target or goal of the business, whereas business objectives are the short-term 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 profitsThe amount of money made after all expenses have been paid.’. 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 aims and objectives are linked to money and cover:
- Business survival is a very common objective for a small business. 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 will become the aim of a business once it has reached its break-evenBreak-even is the point at which revenue and total costs are the same, meaning the business is making neither a profit nor a loss..
- Growth can refer to increasing the number of employees, the number of products sold, or income from sales. Firms may aim to grow domestically (in the same country) or internationally (in other countries).
- 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.
- IncreasingshareholdersA part owner of a private or public limited company.value is an important aim for a limited company. By increasing the value of the shares, they will keep their shareholders happy.
Non-financial aims and objectives
Non-financial aims and objectives are linked to anything other than making money for the business and are categorised as:
- Social and ethical 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. For example, an entrepreneurA calculated risk-taker who sets up a business in return for financial gain. may aim to provide only products that are sustainably sourcedA process where products are obtained in a responsible way, workers are treated fairly, and environmental and social factors are considered. or use only solar energy to power their business.
- Customer satisfaction measures how happy a customer is with the products or services provided by the firm. This is a key objective for firms in a competitive market.
