3.1.2 Business Objectives:

• A business objective is a desired goal, outcome, or specific result a business aims to achieve over time.
• Businesses use strategies to achieve objectives, which vary with the type and size of the business.
• Businesses often pursue multiple objectives simultaneously, where achieving one can aid in achieving others.
• Objectives and related strategies provide direction to stakeholders.
• Performance is managed using Key Performance Indicators (KPIs).
• Objectives should be measurable to help identify and prioritize resources.
• A vision statement outlines the future aspirations and values of a business.
• A mission statement outlines the purpose of a business and how it intends to achieve it.

To Make a Profit

• Profit is the amount of money remaining after deducting expenses from revenue.
• Revenue is the amount of money a business makes from its activities/sales.
• Expenses are the costs associated with running a business.
• To increase profits, businesses must either increase revenue or decrease expenses.
• Profits are essential for growth and are a key measure of business success.
• Profit can be reinvested or given to owners/shareholders.

To Increase Market Share

• Market share is the percentage of sales one business has compared to others in the same industry.
• Businesses aim to increase competitiveness and market share to maximize profits.
• Businesses may improve quality, features, and price to draw customers away from competitors.

To Improve Efficiency

• Efficiency is how well a business uses its resources to produce goods and services and achieve objectives.
• Resources include materials, employees, machinery, information, or time.
• Inefficiency occurs when resources get wasted during production.
• Improving efficiency means achieving more output for each unit of input.
• Productivity refers to how many inputs (resources) it takes to produce output (goods or services).

To Improve Effectiveness

• Effectiveness is the degree to which a business has achieved its stated objectives.
• For example, if strategies implemented increase market share, the business is effective.

To Fulfill a Market Need

• Businesses fulfill needs by providing goods/services that meet customer needs or filling a gap in the market.
• A market comprises the actual or potential customers of a good or service.
• Customer satisfaction can lead to greater loyalty, improved reputation, and increased sales revenue.
• Increased revenue may lead to improved profits, increasing the business's market share.
• Businesses aim to satisfy ever-present customer needs and wants.

To Fulfill a Social Need

• This involves producing goods and services to achieve social objectives that improve the world.
• Some businesses aim to benefit social causes such as the community and environment.
• Fulfilling a social need can improve reputation, increasing sales revenue, profits, or market share.
• Using sustainable resources and production processes helps reduce costs and improve profits.
• A social enterprise's main objective is to fulfil social need by selling products to support that need.

To Meet Shareholder Expectations

• Shareholders are part owners that expect business to be successful and profitable.
• Shareholders expect to receive dividends (a share of profits) and for shares to increase.
• A successful and profitable business is more likely to increase its share price.

Explore business objectives, including profit maximization, revenue generation, and expense management. Understand how businesses use strategies to achieve these goals and align them with their vision and mission statements. Learn about the importance of measurable objectives and Key Performance Indicators (KPIs) in managing performance.