7/3/26, 2:13 PM OneNote
Business Objectives
Sunday, December 21, 2025 5:16 PM
Objectives: goals/targets set by a business
Businesses exist to provide goods and services for consumers and other businesses.
Businesses are more likely to be successful if they set clear objectives.
The importance of clear objectives:
• Employees need something to work towards. Objectives help motivate people. (e.g. bonuses for
staff if certain objectives are met)
• Without objectives, owners might not have the motivation needed to keep the business going.
Owners may allow their business to 'drift', possibly resulting in business failure.
• Objectives help decide where to take the business and the steps necessary to get there. (e.g.
objective: grow business by 10 percent, problem: home market is crowded, solution: launch
products overseas)
• It is easier to assess the performance of a business if objectives are set. If objectives are achieved
=> business had performed well.
Financial objectives:
In the private sector (where individuals or groups of individuals own businesses) financial objectives are
particularly important, because most business owners in the private sector want to make money.
• Survival: all businesses consider survival as important, but it may be the most important objective
of a business from time to time due to reasons such as: a business is vulnerable when it first starts
trading as the owners lack experience and there may be a shortage of resources, or trading
conditions may become difficult, or a strong competitor may emerge. So the short-term business
objectives of said businesses would have been survival
• Profit: most businesses aim to make a profit because their owners want a financial return. They
risk their own money when buying or setting up a business and they want a financial return.
Some businesses try to reach profit maximisation(I.e. make as much profit as they can in a given
time period) (e.g. companies owned by shareholders because shareholders often put a lot of
pressure on the company to pay out large dividends.)
• Sales: Benefits of higher sales:
1. lower costs
2. larger market share
3. higher public profile
4. generate more wealth for owners
Growth of a business may also benefit a wide range of stakeholders linked with the business e.g.
employees because their jobs would be more secure
• Increase market share: businesses may be able to do this if they can win customers from
competitors. Businesses with a large market share may be able to dominate the market (e.g.
charge higher prices), they would also have a higher profile in the market meaning it is easier to
launch new products.
• Financial security: some business owners do not aim for profit maximisation, instead they may aim
to make enough profit to give them financial security (this is sometimes called profit satisficing).
Possible reasons for this:
1. Owners do not want to take on the ectra responsibility of expanding their business, which is often
required to make more profit.
2. Some entrepreneurs run 'lifestyle' businesses (i.e. running a business that generate0s enough
profit and financial security to provide the flexibility needed to allow a particular lifestyle). This
type of business would allow owners to spend more time on their other interests or with their
family. (e.g. shutting down the business for a few months to allow relaxation with family, an action
which requires a level of financial security)
Profit satisficing: making enough profit to satisfy the needs of the business owners.
Non-financial objectives: objectives that are not connected with money. Whether owners have such
objectives depends on the nature of the business. Some business owners may have both types of
objectives.
• Social objectives: Social objectives are designed to improve human well-being.
1. The public sector, where the government owns businesses. In the public sector most businesses
aim to provide a public service and the objectives will be linked to quality of service and reducing
costs.
https://abbeydldcolleges-my.sharepoint.com/personal/sadafjabari_abbeycambridge_co_uk/_layouts/15/Doc.aspx?sourcedoc={eeebb44f-9d89-4f4… 1/3
Business Objectives
Sunday, December 21, 2025 5:16 PM
Objectives: goals/targets set by a business
Businesses exist to provide goods and services for consumers and other businesses.
Businesses are more likely to be successful if they set clear objectives.
The importance of clear objectives:
• Employees need something to work towards. Objectives help motivate people. (e.g. bonuses for
staff if certain objectives are met)
• Without objectives, owners might not have the motivation needed to keep the business going.
Owners may allow their business to 'drift', possibly resulting in business failure.
• Objectives help decide where to take the business and the steps necessary to get there. (e.g.
objective: grow business by 10 percent, problem: home market is crowded, solution: launch
products overseas)
• It is easier to assess the performance of a business if objectives are set. If objectives are achieved
=> business had performed well.
Financial objectives:
In the private sector (where individuals or groups of individuals own businesses) financial objectives are
particularly important, because most business owners in the private sector want to make money.
• Survival: all businesses consider survival as important, but it may be the most important objective
of a business from time to time due to reasons such as: a business is vulnerable when it first starts
trading as the owners lack experience and there may be a shortage of resources, or trading
conditions may become difficult, or a strong competitor may emerge. So the short-term business
objectives of said businesses would have been survival
• Profit: most businesses aim to make a profit because their owners want a financial return. They
risk their own money when buying or setting up a business and they want a financial return.
Some businesses try to reach profit maximisation(I.e. make as much profit as they can in a given
time period) (e.g. companies owned by shareholders because shareholders often put a lot of
pressure on the company to pay out large dividends.)
• Sales: Benefits of higher sales:
1. lower costs
2. larger market share
3. higher public profile
4. generate more wealth for owners
Growth of a business may also benefit a wide range of stakeholders linked with the business e.g.
employees because their jobs would be more secure
• Increase market share: businesses may be able to do this if they can win customers from
competitors. Businesses with a large market share may be able to dominate the market (e.g.
charge higher prices), they would also have a higher profile in the market meaning it is easier to
launch new products.
• Financial security: some business owners do not aim for profit maximisation, instead they may aim
to make enough profit to give them financial security (this is sometimes called profit satisficing).
Possible reasons for this:
1. Owners do not want to take on the ectra responsibility of expanding their business, which is often
required to make more profit.
2. Some entrepreneurs run 'lifestyle' businesses (i.e. running a business that generate0s enough
profit and financial security to provide the flexibility needed to allow a particular lifestyle). This
type of business would allow owners to spend more time on their other interests or with their
family. (e.g. shutting down the business for a few months to allow relaxation with family, an action
which requires a level of financial security)
Profit satisficing: making enough profit to satisfy the needs of the business owners.
Non-financial objectives: objectives that are not connected with money. Whether owners have such
objectives depends on the nature of the business. Some business owners may have both types of
objectives.
• Social objectives: Social objectives are designed to improve human well-being.
1. The public sector, where the government owns businesses. In the public sector most businesses
aim to provide a public service and the objectives will be linked to quality of service and reducing
costs.
https://abbeydldcolleges-my.sharepoint.com/personal/sadafjabari_abbeycambridge_co_uk/_layouts/15/Doc.aspx?sourcedoc={eeebb44f-9d89-4f4… 1/3
