Business Aims and Objectives

• all businesses have aims and objectives. These give a business direction and provide a purpose for what the business does every 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 to meet its aim
• an example of a business aim is to make £120,000 profit 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 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 entrepreneur may have more than one financial aim or objective that they use to give their business direction.
• • 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 are linked to anything other than making money for the business. These are usually linked to personal reasons behind an entrepreneur setting up a business.
• What are non-financial aims and objectives categorized as?

  Social objectives, environmental objectives, personal satisfaction, challenge, customer satisfaction, and independence
• What do social objectives focus on?


  Doing things in an ethical or environmentally friendly manner, or meeting a social need
• What is an example of an environmental objective?


  Providing only sustainably sourced products or using solar energy
• How does personal satisfaction relate to entrepreneurship?

  It involves feeling satisfaction from creating a successful business, often from a hobby or personal interest
• What does the challenge objective entail for an entrepreneur?

  Setting up a business to challenge themselves or step out of their comfort zone
• What does customer satisfaction refer to?


  How happy customers are with the products or services they receive
• What does independence mean for an entrepreneur?

  Working for themselves, running their own business, and making key business decisions
• What are the key non-financial aims and objectives of entrepreneurs?

  • Social objectives
  • Environmental objectives
  • Personal satisfaction
  • Challenge
  • Customer satisfaction
  • Independence
• What does the SMART acronym stand for in business objectives?

  Specific, Measurable, Agreed, Realistic, Time-bound
• Why is the SMART acronym used in creating business objectives?

  It makes objectives clear and easy to understand while providing clear goals for a business
• What does the 'S' in SMART stand for?

  Specific
• What does it mean for an objective to be 'Specific'?

  Objectives must be clear and state exactly what is needed, such as making more profit or increasing sales
• What does the 'M' in SMART stand for?

  Measurable
• Why must objectives be 'Measurable'?


  A business must be able to measure whether they have met an objective by specifying an amount
• If a business wants to increase sales, what is an example of a measurable objective?

  To increase sales by £7500 each month for the next 6 months
• What does the 'A' in SMART stand for?

  Agreed
• Why is it important for objectives to be 'Agreed'?

  Stakeholders must agree on objectives to increase the chances of success
• What does the 'R' in SMART stand for?

  Realistic
• What does it mean for an objective to be 'Realistic'?

  Objectives must be achievable given the size and scale of the business
• Why wouldn't a small café set an objective to make £1 million profit?

  Because it is not a realistic objective for the size and scale of the business
• What does the 'T' in SMART stand for?

  Time-bound
• Why must objectives be 'Time-bound'?

  Objectives must have a time limit to create urgency and focus
• What are some examples of SMART objectives?

  • To make an additional 15% profit within the next 12 months
  • To increase sales by £7500 each month for the next 6 months
  • To reduce waste by 50% in the next 6 months
  • To reduce staff turnover by 10% within the next 12 months
• What are aims and objectives in a business context?

  Aims and objectives are tailored goals specific to a particular business.
• Why do aims and objectives differ between businesses?

  They differ because businesses operate in different sectors and vary in size and scale.
• What does the term 'sector' refer to in a business context?

  Sector refers to whether a business provides goods or services and the type of goods or services it offers.
• How does operating in different sectors affect a business's aims and objectives?

  Operating in different sectors leads to different aims and objectives tailored to the specific goods or services offered.
• Give an example of how a pizza restaurant's aim differs from that of a florist.

  A pizza restaurant might aim to sell 10 varieties of pizza, while a florist would have different aims related to floral arrangements.
• What impact does the size and scale of a business have on its aims and objectives?

  The size and scale of a business significantly influence its aims and objectives, such as a new business aiming for survival versus an established business aiming for profit.
• What is a common aim for a new business?

  A common aim for a new business is survival.