Setting business aims and objectives

• Aim

  The general goal of a business
• Objective


  A specific target that is set for a business to achieve
• Survival


  The capacity of a business to stay in business. It is dependent on the business selling sufficient amounts of its goods/services to cover all its costs
• Profit maximisation


  A business' ability to make maximum profit with low operating expenses
• Market share


  The proportion of the whole market for a product that is held by the business
• Share value


  The value that a shareholder is able to get for the money invested in the business: capital gains, dividend payments, pay-outs to shareholders or proceeds from buyback programmes
• Growth

  A business' increase in size. Methods include: asset value, employees, market share, markets, profits and sales
• Customer satisfaction


  Whether customers are pleased with the goods/services they receive; whether they would purchase again
• Social objectives


  A business' goals that relate to fair treatment of the people concerned: customers, investors, suppliers or workers
• Ethical objectives


  A business' goals that relate to fair business practice or moral guidelines and make a positive contribution to the business reputation
• Setting business aims and objectives

  1. Direction

  2. Focus for employees

  3. Allows planning

  4. Measurement of success
• Objectives will vary between businesses depending on: size of the business, level of competition, type of business, profit or not for profit business
• SMART Objectives

  • Specific
  • Measurable
  • Agreed
  • Realistic
  • Time-bound
• Reasons for changing objectives

  • Internal reasons: business has achieved one objective and needs another, changing views of the owners/shareholders
  • External reasons: new competitors, technological change, change in the economic environment
• Business objectives provide a point of focus, helping a business to make decisions about what to do and to review how things are going. This allows a business to make decisions if they go off track
• Formula for market share

  Sales of product/ total market sales x100