Topic 1.3.1 Business aims and objectives Flashcards
What is a business aim?
A business aim is the overall purpose for the business,the long-term goal.
What is a business objective?
A business objective is specific,measurable targets to help meet aims of the objectives.
What are the financial aims and objectives of a business?
Survival-This means where a business costs is equal to the amount of revenue they receive.As a result,the business is not making a loss or profit but are still operating at break-even.
Profit maximisation-This is where a business achieves the highest surplus over the costs of the business which they could uses to reinvest into improving the product or service of their business.As a result this increases customer satisfaction and helps lead to business success.
Increasing market share.This means that a business can stand out against its competitors since they have more control over the market.As a result it will attract more customers who want to buy from the market you operate in.
Increased sales-Attracting more customers
Financial security-Gives entrepreneur stability in life
What are the non financial aims and objectives of the business?
Social objectives-To make the business more ethically moral.e.g more environmentally responsible leading to better reputation for the business and attracting more customers who will trust your business because it has good ethics..As a result,leads to customer loyalty.
Personal satisfaction-Entreprenuers fell more satisfied if they are are succesful as this meets self esteem needs.
Challenge-Test themselves to see if they can achieve their goals.
Independence and control-Owner has complete control-decision making-product,location,pricing strategies
Why do aims and objectives differ between businesses?
Business aims and objectives are likely to differ based on the industry,the business it operates in,the owners belief and priorities and the length of the time the business has been running.
