Lesson 3 - Setting Aims and Objectives for a 'start up' business

What are AIMS and OBJECTIVES?

Read the five minute interview with the owner of Carluccio's

They are TYPES of  TARGETS so a business needs to be able to distinguish between them.

The AIM is usually its LONG TERM TARGET - 'excellent service' or 'the beverage of choice' and are difficult to measure

The AIMS may be stated as 'MISSION STATEMENTS' and although not achievable in the short term give a good steer for the business in terms of direction.

The OBJECTIVES of the business are the shorter term targets that it HITS on its way to its AIMS.

These TARGETS should be SMART:

• Specific - as definite as possible
• Measurable - should have figures or percentages to assess it
• Attainable - it should be a target that is possible to reach
• Relevant - it should form a logical part of the overall strategy of the business
• Time -Related - there should be a set time for the achievement of the target

TYPES of OBJECTIVES

• BEING SATISFIED
• Wanting to reach a MAXIMUM - this often refers to PROFIT
• Wanting to reach a MINIMUM - this may refer to 'LABOUR TURNOVER'

The most common targets are:

• Profit usually represented as a percentage of TURNOVER
• Growth - for those businesses that want to EXPAND into their current or into NEW MARKETS
• MARKET SHARE - the bigger the market share the more POWER they have in that market
• CUSTOMER SATISFACTION - do customers return, are complaints at a minimum, is customer feedback good?
• ENVIRONMENT & ETHICAL - is the company seen to be ETHICAL and does it care about the responsibility it has to the environment in which it operates?  Companies that have the best CORPORATE SOCIAL RESPONSIBILITY are those that have the best REPUTATION in the community

For notes on business aims and objectives click here

Typical exam questions on 'Aims & Objectives' for a start up business

1. What is a business aim?
2. What is a business objective?
3. What is a mission statement?
4. What does SMART stand for?
5. Why should a business always have SMART targets?
6. Name the three broad type of business objectives
7. List three things that a business might aim to maximise
8. List three things that a business might aim to minimise
9. List one objective of a small business that may not be appropriate for a large business
10. List one objective of a large business that may not be appropriate for a small business
11. What do we mean by 'SOCIAL RESPONSIBILITY'?

Still don't get it click here

 

Worksheet - extension, challenge or additional homework opportunities to secure your A*

Aims and objectives

Business objectives - financial

Business objectives - non financial

Extension 9 mark question exercise click here

Key term - Homework 10/10

Business aim

Business objective

Growth

Profit

Market share

Customer satisfaction

Social responsibility (environment and ethics)

Sales

Survive

Break even

To be tested week