Business Aims & Objectives (Edexcel GCSE Business)

Revision Note

Author

Expertise

Economics & Business Subject Lead

Every successful business needs to have clear aims and objectives that guide its operations and drive its growth
Business aims are the long-term aspirations of an organization
Business objectives are specific, measurable, achievable, relevant, and time-bound targets (SMART targets) that must be achieved to realise those aspirations
Aims and objectives align the efforts of all employees towards a common vision and ensure that everyone is working towards the same goals
- They are critical for businesses to function effectively and achieve long-term success
- E.g. A business aim may be to become the market leader in a particular industry, while the corresponding objectives may include increasing sales by 25% over the next three years, improving customer satisfaction by 15%, and expanding into new geographic markets

All entrepreneurs tend to have a mix of financial and non financial objectives when starting a business

Financial & Non-financial Objectives

Financial

Non-financial

Survival: Most crucially in the first year. 60% of all start-ups in the UK fail within their first three years

Social entrepreneurship: Many entrepreneurs aim to address social issues. Helping others still needs to have a financial objective behind it for a business to succeed and be sustainable
- E.g. After a trip to Argentina in 2006, Blake Mycoskie started TOMS Shoes, using some of his own money to launch the company. TOMS pledged to donate one pair of shoes for every one sold

Sales: A business must get customers who will buy its product to earn an income for its owners

Personal satisfaction: This may be gained from doing what the entrepreneur wants to do i.e starting a business which aligns with personal passions

Profit: The sales revenue received must be more than the costs to make a profit

Challenge: This could be setting up something that nobody else has thought of and can link with personal satisfaction. It may be a chance to prove to others (or to the entrepreneur) that something can be done

Market share: The percentage of the total market revenue that a single firm has e.g. Costa had an 8% market share of 'out-of-home' coffee in the UK in 2020. If market share is increasing it means that the firm is competing effectively

Independence and control: The entrepreneur may want to control their own time and the direction of their business. Independence enables people to do things their way which can be very motivational

Financial security: This is where a business and its owners can pay all the overheads (bills), make a profit, and have some in reserve to pay for unexpected emergencies

Business aims and objectives can vary significantly between different businesses for numerous reasons including:

1-3-1---why-aims-and-objectives-vary-between-businesses

Businesses objectives are influenced by a range of factors

Industry
Businesses operating in different industries will have different objectives and aims. E.g. A healthcare company's primary objective might be to improve the health and wellbeing of people, while a financial services firm's objective might be to maximise profits
Size
The size of a business can also influence its aims and objectives. A small business may focus on survival and achieving sustainable growth, while a larger corporation may prioritise product diversification and market dominance
Culture
Each business has its unique culture, which reflects its values, beliefs, and overall vision. This culture can impact the organization's aims and objectives, as well as the strategies that the business uses to achieve them
Ownership structure
The ownership structure of a business can influence its objectives e.g. a family-owned business may prioritise long-term stability and legacy over short-term profitability
Geographic location
Businesses located in developed economies may prioritise innovation and technology adoption, while those in developing economies may prioritise job creation

to absolutely everything:

the (exam) results speak for themselves:

Did this page help you?