What aims and objectives are
An aim is what a business wants to achieve in the long term — the general direction it is heading in. An objective is a specific, measurable target that helps the business reach that aim.
The difference is precision. "To grow" is an aim. "To increase sales by 10% within twelve months" is an objective, because you could check at the end of the year whether it was met.
That is why objectives matter: they give staff something definite to work towards, they let the owner measure progress, and they make it possible to tell whether the business is succeeding.
- Aim
- What a business wants to achieve in the long term.
- Objective
- A specific, measurable target that helps achieve an aim.
Aims and objectives when starting up
The specification splits these into financial and non-financial, and expects you to know both lists.
Survival is almost always the first objective for a new business, and it is worth understanding why rather than just remembering it. A start-up has few customers, no reputation, and is spending money on setting up before much comes in. Most business failures happen in the first few years. So in year one the aim is simply to still be trading in year two — profit and market share come later.
It also explains a pattern you will meet in 2.1.2: objectives change as a business evolves, and the shift from survival to growth is the most common change of all.
- Survival
- the objective of continuing to trade, almost always the first objective for a new business with few customers, no reputation and money going out faster than it comes in
- Market share
- a business's sales as a proportion of the total sales in its market
Why aims and objectives differ between businesses
Not every business wants the same thing, and the specification asks you to explain why. The main reasons:
• Size and age — a start-up prioritises survival; an established business can aim for growth or market share. • What the owner wants — some owners want the largest possible profit, others want a manageable business that leaves them time for family, and some are motivated mainly by independence. • The type of business — a charity or social enterprise has social objectives at its centre, where a private company usually prioritises profit. • The market — in a fast-growing market a business may chase market share; in a shrinking one it may focus on survival. • The economic climate — in a downturn, ambitious growth targets are often replaced by survival.
Worked example
Two people start businesses in the same town. One aims to open ten branches within five years; the other wants a single shop that supports her family. Explain why their objectives differ.
- Identify what each owner personally wants from the business — that is the strongest single influence.
- The first owner is motivated by growth and probably by profit and market share, and is willing to take on more risk and probably more borrowing.
- The second is motivated by financial security and independence — a reliable income and control over her own time.
- Note that neither is wrong: objectives follow from what the owner wants, not from a rule about what businesses should do.
- Add a consequence, because these questions reward it.
Answer: Their objectives differ because their owners want different things. The first is pursuing growth and market share and accepts higher risk to get it; the second prioritises financial security, personal satisfaction and independence over expansion. Both are valid — and they will lead to very different decisions about borrowing, hiring and location.
Common mistake
"To make as much profit as possible" is not the objective of every business. Social enterprises, charities and many small owners deliberately trade some profit for other goals — and saying so shows you understand why the specification lists non-financial objectives at all.
Before you practise
- An aim is a long-term goal; an objective is a specific, measurable target that helps reach it.
- Financial objectives: survival, profit, sales, market share, financial security.
- Non-financial objectives: social objectives, personal satisfaction, challenge, independence and control.
- Survival is usually the first objective of a start-up, because most failures happen early.
- Objectives differ because of the size and age of the business, what the owner wants, the type of business, the market and the economic climate.