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GCSEBusinessEdexcelRevision Notes1. Investigating Small Business1.3 Putting a Business Idea into PracticeBusiness Aims & Objectives

Business Aims & Objectives (Edexcel GCSE Business)

Revision Note

Steve Vorster

Written by: Steve Vorster

Reviewed by: Jenna Quinn

An Introduction to Business Aims and Objectives

  • 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

Common Business Aims & Objectives for Start-ups

  • 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

 

Why Aims & Objectives Vary Between Businesses

  • 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
 

  1. 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

  2. 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

  3. 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

  4. 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

  5. Geographic location
    Businesses located in developed economies may prioritise innovation and technology adoption, while those in developing economies may prioritise job creation

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    Author
    Reviewer
    Steve Vorster

    Author: Steve Vorster

    Expertise: Economics & Business Subject Lead

    Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.

    Jenna Quinn

    Author: Jenna Quinn

    Expertise: Head of New Subjects

    Jenna studied at Cardiff University before training to become a science teacher at the University of Bath specialising in Biology (although she loves teaching all three sciences at GCSE level!). Teaching is her passion, and with 10 years experience teaching across a wide range of specifications – from GCSE and A Level Biology in the UK to IGCSE and IB Biology internationally – she knows what is required to pass those Biology exams.