Business Aims and Objectives Explained

Summary

This video script distinguishes between business aims and objectives, illustrating how they guide a company's direction. Aims are the overarching goals, while objectives are smaller, actionable targets that contribute to these aims. The script uses a candle-selling business as an example, detailing financial aims like revenue generation and profit, and non-financial aims such as social responsibility and personal satisfaction. It emphasizes that aims vary by business size, market, and evolution, adapting over time as the business grows.

Takeaways

• 🎯 Business aims are the overall targets or goals of a business, while objectives are smaller targets that help achieve the overall aim.
• 🗺️ Aims can be visualized as a destination, and objectives are the paths to reach that destination.
• 💹 Businesses establish aims and objectives to provide direction and specific targets to work towards.
• 📈 An example of a business aim is for a small candle business to generate £60,000 in revenue in 2021, which is supported by various objectives like increasing sales, marketing, and developing new products.
• 💰 Financial aims are common and include survival, making a profit, sales targets, market share, and financial security.
• 🌐 Survival financially means covering costs without making a profit or loss, which is crucial for new businesses.
• 📊 Profit aims involve having money left after costs are deducted from revenue, indicating a business is moving beyond mere survival.
• 📈 Sales targets set specific goals, such as selling a certain number of products, and can be distributed among staff.
• 🏪 Market share aims involve controlling a certain percentage of the market, with businesses aiming to increase their share over competitors.
• 🏦 Financial security aims are about ensuring the business can cover costs and meet financial commitments easily.
• 🌿 Non-financial aims are not linked to monetary success and can include social aims, personal satisfaction, challenge, and control over business operations.
• 🐇 Social aims can be central to a business's identity, such as Lush's commitment to fighting animal cruelty.
• 🚀 Personal satisfaction aims might involve turning a hobby into a business or finding career fulfillment.
• 💪 The challenge of starting a business from scratch and the desire for control over one's work can be strong non-financial drivers.
• 🌟 Aims and objectives differ between businesses due to their unique desires, size, age, and the market they operate in.
• 📊 Size and scale impact financial aims, with larger, established businesses less concerned with survival and more with growth and profit.
• 🌍 The market a business operates in influences its non-financial aims, with aims fitting the industry and consumer expectations.
• 🕒 Aims and objectives evolve over time as a business grows, requiring updated targets to continue challenging the business and its owners.

Q & A

What is the difference between business aims and objectives?

A business aim is the overall target or goal of the business, while business objectives are smaller targets that help meet that overall aim. The aim is like a destination, and the objectives are the roads to reach that destination.

Why do businesses create aims and objectives?

Businesses create aims and objectives to give them a purpose and a target to work towards, providing direction and focus for their operations.

Can you provide an example of a business aim and how it is broken down into objectives?

An example of a business aim is for a small candle business to generate £60,000 of revenue in 2021. Objectives to reach this aim include increasing sales of bestsellers by 20%, increasing Facebook marketing by £5,000 during October and November, developing a new candle range for quieter months, and selling at local farmers markets.

What are some common financial aims for businesses?

Common financial aims include survival financially (covering costs), making a profit, achieving sales targets, increasing market share, and ensuring financial security.

How does a sales target contribute to a business's overall financial aim?

A sales target sets a specific aim for the business, such as selling a certain number of products, and helps employees work towards a common goal, which directly contributes to the business's revenue and financial success.

What is meant by market share in the context of business aims?

Market share refers to the percentage of the market controlled by a particular company. A business may aim to increase its market share as part of its financial objectives.

Why are non-financial aims important for businesses?

Non-financial aims are important because they can be the main driver for starting a business, help solve social issues, or align with the personal values of the entrepreneur, contributing to the business's identity and reputation.

Give an example of a non-financial aim related to social responsibility.

An example of a non-financial aim is social aims, such as Lush's commitment to fight animal cruelty and not using ingredients tested on animals, which is core to their business identity.

How can personal satisfaction be a non-financial aim for a business?

Personal satisfaction can be a non-financial aim when an entrepreneur starts a business to turn a hobby into a career, providing them with a sense of fulfillment and career satisfaction.

Why do aims and objectives differ between businesses?

Aims and objectives differ between businesses because each business has different desires, operates in different markets, and has varying sizes and stages of development, which all influence the specific goals they set.

How can the size and scale of a business impact its aims and objectives?

The size and scale of a business impact its aims and objectives because larger, more established businesses may focus on growth and market dominance, while smaller or newer businesses may prioritize survival and building a customer base.

Do business aims and objectives remain static over time?

No, business aims and objectives change over time as the business grows and progresses. For example, a business that once aimed to survive may later aim for greater profits or market expansion.