Business aims and objectives

Businesses are started all the time in the world with each one having a slightly different objective when starting out for the first time. Each company will have slightly different reasons for coming into existence, but the vast majority of new ventures are started for one main reason – to make money. Having clear aims and objectives in a business is critical, as without these in place, it will be very hard to outline what the business needs to do and where it should be heading.

Not having clear aims and objectives will lead to the owners or employees of the business not understanding what is needed from them. Resources could then be spent in areas with little amounts of progress found in the direction that the company wishes to move. In order to motivate employees, specific objectives should be set so that the business does not simply ‘drift’ and become unproductive.

Financial aims and objectives

Almost every new business (especially private sector companies) will need to put in place financial aims. Doing this helps the business to judge if it has been successful in its practice over a certain period of time. Financial objectives will include:

• Survival – every business will need to consider survival as an important factor. Without the ability to survive for the long term, a business will not be in operation and will have paid the ultimate price. In the first year of trading, a lot of businesses fail. Getting through the first 12 months may sound like a boring target to set (after all, people don’t start businesses in order to simply survive) but this is not such a bad objective to have. Getting through that first year can allow a business to build a platform and establish itself before building into the following years to become a success.
• To create wealth – almost all private businesses are set up to offer products or services in order to make money. There is no shame in admitting this is the reason for starting a business. Setting a financial aim to grow a business will result in a number of benefits such as lower costs, having a large market share, having a better profile in the industry and generating more wealth for the owners.
• Sales – another financial objective could be to get a certain amount of sales or a certain amount of money made through selling goods or services. This type of objective is good for a company as it creates competitiveness and sets a target that is very definitive – it is either achieved or it isn’t, with nothing left to individual interpretation.
• Increase the image of the business – many businesses try to increase their brand over time. Doing this has a range of benefits such as an increased awareness of the company and an improved image. Usually this type of aim will be introduced to give something else, such as an increase in profit or to attract better qualified staff members.
• Financial security – having the aim of financial security will involve a number of different aspects of the business. Sales must be generated and money invested back into the company in order to make it financially independent as this is the best possible way to secure the long-term finances of the business. Purchasing premises or machinery rather than renting or buying is one of the best ways to secure the company’s financial status for the future.

Non-financial aims and objectives

Not all objectives for a business will be financial. Some will need to be set that are different from simply making money as the business owners or staff work towards other goals. Public sector organisations will have more non-financial objectives than private businesses as they are service based and funded through taxes. The most common non-financial aims include:

• Social objectives – a business or organisation may want to work in a manner that is socially conscious. This could include giving fair deals for all workers (such as high wages or Fairtrade agreements) or by offering a great deal to clients. Social objectives refer to when a business works to offer something that is good for people rather than focusing on making money. Having a small carbon footprint and not doing damage to the local surroundings is also something that a socially conscious business will need to take into account
• Personal satisfaction – setting up a business can be done simply to prove a point. Many companies are started by someone who is trying to prove, either to themselves or others, that they can run a business successfully. This personal drive and ambition will result in a business that is focused on success and doing things differently in a market rather than to simply make money.
• Independence – if a business works very closely with another (or is even a part of a large corporation) it may branch off in order to become independent. Doing this will allow the business directors to make their own decisions and be self-reliant rather than having to work in a way that the other company prefers.
• Control of a market – rather than simply trying to make money, a business may try to gain as much control of a market as possible. Doing this will ensure that the company has a long-term future and can dictate what happens in the business market – putting itself in a very strong and stable position. Doing this can require a business to make smaller profits in the short term but will give a greater amount of control for the future.

Why the aims of a business differ

Since every business is unique and operated by specific individuals, each will have slightly different aims and objectives. Some of the main things that will impact upon the type of aims set by a business include:

• The market that the business operates in (e.g. either private or public
• The size of the business and its location
• The people that work for the business
• The amount of money the business has