HOW DO SMALL BUSINESSES OPERATE Business Objectives

LEARNING INTENTIONS AND SUCCESS CRITERIA LEARNING INTENTIONS: I understand the different objectives that businesses may be pursuing. SUCCESS CRITERIA: I can explain what a business objective is. I can identify suitable objectives for different types of business. I can explain the purpose of a Mission Statement.

What is an Objective An objective is something a business aims for. It is a target or goal to be achieved. Objectives help a business to focus on what it needs to do to achieve its goals. FOR EXAMPLE - You have the objective to get good results in all your subjects this year, but this will not happen by itself – you will need to attend classes, participate in activities, complete homework and study.

What Objectives do Businesses Have? There are 7 objectives that we will learn about: Survival Profit Providing a Quality Service Customer Satisfaction Growth Market Share Social Responsibility

Survival This is a key objective as all the other objectives would be pointless if the business did not survive. Survival is particularly important to small businesses who find it more difficult to survive due to lack of financial resources. When survival is threatened, the business must focus of lowering costs and cutting production to save money.

Profit Private Sector businesses are usually set up with the aim of maximizing profits for their owners. Public and Third Sector businesses are not. Profit arises when income from sales is more than the businesses costs for making those sales.

Providing a Quality Service This is an objective of all businesses but particularly those who offer services rather than goods. It is also a key objective of Public and Third Sector businesses, as they do not aim to make a profit but rather to provide the best service they can within the budget that is available to them.

Customer Satisfaction All businesses want to have a positive image and to be highly regarded by their customers so that customers stay loyal to their business. To achieve satisfaction they have to provide high quality goods and services, have a customer care strategy, high levels of staff training and have good after-sales service.

Growth Private Sector businesses are interested in growth so that they can make more profit. Growth can be achieved by employing more staff, opening more branches, changing business structure eg from a sole trader to a partnership or Ltd Company.

Market Share Increasing the market share of the total number of possible customers is an objective of Private Sector businesses. The more customers they have, the more Sales and Profits they will achieve. If a business has the highest market share, they are known as the MARKET LEADER.

Social Responsibility All businesses nowadays are expected to show a degree of social responsibility. This means they have to operate in an ethical way by being seen to be doing the right thing as regards their staff, customers and the local community and environment. If a business fails to act in this way, they can be the target of negative publicity and pressure groups, which may have an impact on their sales and profits.

TASK Complete Worksheet 7 in your jotters.

THE MISSION STATEMENT Businesses often publish their objectives and core values in a document called a Mission Statement. This document is of interest to stakeholders because it shows what the business is trying to achieve and how it is going to go about this.

MISSION STATEMENT TASK In small groups access the following websites to find information about the organisation’s Mission Statement and prepare a short powerpoint presentation about this