1.5.3 Business Objectives

What are short-term and long-term business objectives?

• Short-term objectives: specific, measurable, achievable, realistic, time-bound (SMART) goals.

• Long-term objectives: quantifiable targets to achieve the business’s aim or mission within a certain timeframe.

What is the objective of survival for a business?

To continue existing, often the primary objective for start-ups or struggling businesses. Achieved by setting cash flow objectives to meet day-to-day expenses.

What is profit maximisation?

Achieving the highest possible profit, where the difference between sales revenue and costs is greatest.
Basic formula: Profit = Revenue − Cost of Sales

What are sales maximisation and market share?

• Sales maximisation: highest possible sales by volume or value within a time period.

• Market share: proportion of total market sales a firm has; formula: (Business A sales ÷ Total market sales) × 100. Market leader = largest % of market.

What is cost efficiency in business?

Minimising costs, expenses, and waste to produce maximum output with minimal input. Supports profit maximisation but costs/waste can’t be eliminated completely.

What is employee welfare and why is it important?

Facilities and benefits to support employees’ economic and physical well-being. Motivated staff increase productivity and maintain positive employer–employee relations.

What is customer satisfaction and why is it important?

Ensuring goods/services meet customer needs and expectations. Builds loyalty, encourages repeat business, and maximises long-term sales

What are social objectives and why do businesses set objectives in general?

• Social objectives: act ethically, support community, create jobs, improve education.

• Purpose of objectives: plan business activities, reduce poor decisions/resource waste, increase survival and success chances.