Break even; when a business breaks even it means that they have focused on covering the costs of production and running the business. For example, a charity’s aim would be to break even if they hold an event as they do not want to make a profit because the profit that is made will be going to the organisation.
Growth; a business will try to expand their stores and increase their sales. For example, the owner of ‘Iffy’s Coffee shop’ will want to have five more stores in a 30 mile radius, this will expand the store and also grow ties in with profit maximisation, as the business will be making more profit when they have expanded.
Market share; a business with shares in the stock market will try and increase the value of their shares each year.
Objectives
Objectives are more precise then aims, objectives are essential because aims in themselves are too general and may be quite overwhelming. So for a business that wants to achieve its aims they will need to set objectives that are sensible and also achievable. For a business to have more chance to achieve their aims they should set SMART objectives.
What is a SMART objective?
A SMART objective is an objective that is precise, with measurable targets that will help a business achieve its aims. SMART means -
S – Specific; a business will need to be specific in what they want to achieve. For example if a business wants to open 5 more stores, they will need to be specific in how long they want to achieve this.
M – Measurable; a business will need to measure its progress while they are making progress on their objectives.
A – Achievable; a business will need to make its objectives achievable, for example if a business wants to open 5 more stores they will need to have the funds to make it achievable.
R – Realistic; the businesses objectives will need to be realistic, For example if a business wants to open 5 stores they will need to have a realistic time scale for when they want the stores to open.
T – Time specific; an objective should always include a date for achievement, for the objective set.
Private sector business: will offer goods or services, and need to make a profit to survive. A business can only break even, or make a loss for an exceedingly small amount of time otherwise the business will have to close down.
Public sector business: are owned by the state, many people offer essential services free of charge or below cost price, such as the NHS. Remember that the government also owns businesses that aim to be profitable, for example, The Royal Mail.
Voluntary sector organisations: raise funds that are used to support a particular cause. They aim to make a surplus, after the costs of the business has been deducted, and reinvested this into the business.
Examples of aims and objectives
An example of an aim and objective for ‘GB Store’ which is a sole trader that sells groceries.
Aim: To make a 10% more profit then in 2009.
An objective to the aim above will be to expand the stock that is sold in store and also to rotate stock. To take regular stock checks to keep the shelves well stocked, another is to stock things for different occasions, for example Christmas and Easter.
An example of an aim and objective for ASDA could be.
Aim: To have an extra 20 stores throughout the UK by 2011
An objective for this aim could be to build stores in the UK where there is a high demand for large supermarkets to be built, also carry out surveys to see if there will be demand for large supermarkets in a certain area.
