Business Aims and Objectives

Understanding Business Aims and Objectives

  • Aims are the long-term goals of a business. They provide a direction for the business to move towards and a measure of successful progress.

  • Objectives are specific, measurable, achievable goals that support the business in reaching its overall aims. They are often short to medium term in nature.

  • The main aim for most businesses is to maximise profits. Profit maximisation happens when total revenue is higher than total costs.

Types of Business Objectives

  • Survival: This is often the main objective of start-ups and businesses facing tough competition or difficult economic conditions.

  • Growth: This is a key objective for many businesses. Growth can happen organically or through business strategies like mergers, acquisitions, and expansion into new markets.

  • Profit Satisfaction: Once a certain level of profit is achieved, some business owners may be content and focus on other objectives, like providing excellent customer service or giving back to the community.

  • Increasing Market Share: This can give a business more power over suppliers and can increase customer loyalty and expand potential sales.

Setting SMART Objectives

  • Business objectives should be SMART: Specific, Measurable, Achievable, Relevant, Time-Related.

  • SMART objectives give clear direction and allow for assessment of progress.

  • They support the longer-term aims of a business by providing short to medium term goals to strive towards.

Stakeholder Influence on Aims and Objectives

  • Stakeholders can significantly influence the aims and objectives of a business.

  • Different stakeholders may have different objectives. For example, shareholders may want to maximise profits, while employees may seek job security and good wages, and customers may want high quality products at a fair price.

  • It’s important for businesses to consider these various stakeholder expectations when setting aims and objectives.

Remember, aims and objectives are interrelated and both are essential for guiding a business towards success. Businesses need to understand when to prioritise certain objectives based on circumstances and stakeholder expectation. Additionally, the importance of setting SMART objectives cannot be overstated as they provide a structured and easily measurable way to achieve business aims.