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People with goals succeed because they know where they are going...It's as simple as that."
- Earl Nightingale
As with people, successful businesses also have clearly defined aims and objectives. Let's take a look at what these are exactly and why it is essential for businesses to have them.
Business aims are the long-term goals a company sets for itself.
It sets the direction for the company and guides employees in their tasks. It is a short statement that explains why the business exists and what it is planning to achieve.
Business objectives are steps taken by a company to achieve its business aims. Objectives guide the next step to be taken to move closer to the company aim. Objectives are also measured to make sure that all the right steps are orderly executed to achieve the aims. To help managers and employees develop, manage and track objectives the right way, they create SMART objectives. This is a smarter way of creating objectives as it helps to put together an action plan, increase productivity, and track progress. SMART is an acronym that stands for Specific, Measurable, Achievable, Relevant, Time-oriented.
SMART Objectives for Businesses, StudySmarter
Financial aim - make a profit of £24,000 by the next financial year.
The objective for this aim would be: make profits of £2,000 for the next 12 months.
Financial aim - increase revenue in the next five years.
Objectives for this aim would be as follows:
Increase product awareness
Acquire new customer
Create or improve digital platform
Increase conversion rate
Reduce overhead costs
Non-financial aim - Become the most sustainable company in the industry.
Objectives for this aim would be as follows:
Use recycled raw materials
Use production methods that reduce CO2 emissions
Some of the common financial aims and objectives are:
Increase revenue
Increase profit margins
Earn a return on investment
Attain financial stability
Some of the common non-financial aims and objectives are:
Employee satisfaction
Customer satisfaction
Social responsibility
Relation with suppliers
Setting aims and objectives are very important for a company, as it is a key component in ensuring success. It guides the course of action and helps to keep employees focused and act responsibly. It ensures clarity within the whole organisation. It also has many other advantages.
A set aim guides a company and its employees in making the right decisions. It directs the company in the right manner.
A goal or aim helps to understand what the right next step is. It helps in planning every step of the business.
Having a goal to reach can improve employee motivation. It can be further improved by having an incentive system in place for the first employee to reach an objective.
Having set objectives gives employees a means to measure how much they have done and keep track of their performance. This helps to avoid unnecessary stress which employees face when they are unaware of their overall performance rate.
Setting steps (objectives) to accomplish an aim helps to achieve the aim faster. Setting objectives tells an employee exactly what is to be done next, and this saves a lot of time and prevents the employee from performing any unnecessary tasks.
Aims and objectives are business-specific and differ for different organisations. They are crucial components in helping a business grow. Aims and objectives can be financial or non-financial.
Aims in business is a short statement stating the long-term goal of a business that reflects what the organisation stands for. It sets the direction for the company and guides the employees in their daily operations.
Objectives are the statements explaining the steps that will be taken by the organisation to achieve the aim. Objectives are measurable and help to identify if the organisation is moving in the right direction.
Business objectives are steps taken by an organisation to achieve its set aim. It guides an organisation in making the right decisions and achieving the aims promptly. An objective is effective if it is SMART. SMART is an acronym that stands for:
Specific: A clearly stated aim-specific objective that outlines what is to be done and how it should be done.
Measurable: The outcome of an objective needs to be measurable as this helps track the objective’s progress. The outcome can be measurable in numbers, percentage, rate and so on.
Achievable: the agreed-upon objectives should be achievable by the organisation’s capacity.
Relevant: the objectives must be relevant to the aim the organisation is trying to achieve.
Time-oriented: a deadline should be set for accomplishing the objectives as this ensures achieving the aim in the decided time. It helps to organise tasks and also measure the objective outcome.
The aim is what a company strives to achieve over a long period. Objectives are the steps taken by the company to achieve the aim.
An aim is written in broad terms and is not specific. Objectives are very specific statements that have measurable outcomes.
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