Business aims and objectives

Sales as an aim means a business wants to increase the amount it sells or the value of those sales. The amount sold could be the number of items, tickets or appointments. The value of sales is the money taken from selling, sometimes called sales revenue. Sales is a financial aim because it is about the income the business receives from selling.

A business can increase sales in two main ways: by selling more to existing customers or by attracting new customers.

• Existing customers: a business can encourage people who already buy from it to buy more often, buy extra items or spend more each visit. For example, a board game café could offer a loyalty card or a food-and-game deal.
• New customers: a business can reach people who have not bought from it before. The café could advertise to families or run beginner evenings for people new to board games.

For example, The Dice Den, a board game café, might aim to increase sales by 15% in a year. It could sell more weekday tickets to existing customers through a quiz night, and attract new customers by advertising beginner evenings locally.

A business's market share is the proportion of the whole market it serves, measured as a percentage. If you sell one in every ten items bought in a market, your market share is 10%. It is not the same as sales: sales are the amount you sell, while market share compares that amount with the whole market, including every rival.

A market share aim

A market share aim means increasing the business's percentage of the total market. It is a financial aim, because it is about the business's position in its market and is calculated from sales data. An owner might turn it into an objective such as “raise our share of the city's cinema market from 12.5% to 17.5% within a year” — specific and measurable, so progress can be checked.

For example, three cinemas in a city sell 48,000 tickets a year between them. The Rio sells 6,000 of them, so its market share is 12.5% (6,000 ÷ 48,000 × 100). If the Rio sells 2,400 more tickets next year while the market stays at 48,000, its share rises to 17.5%.

Why aim for this? If the total market stays the same size, a rising share means the business is winning customers from rivals and becoming stronger in its market. That can bring in more revenue and make it harder for competitors to win customers back. To get there, an owner may cut prices, advertise more or improve service — spending money now to build a bigger position later. Sales can still grow while market share falls, if the whole market grows faster than the business does.

Financial security is a financial aim where a business has stable finances, earns enough income to cover its costs and faces less financial risk or worry. It means the owner can pay bills on time and handle a quiet month without panic. It is not the same as making the highest possible profit: a business could earn a large profit one month and still feel insecure if sales are very uneven or debts are high.

Financial security is often especially important to smaller, individual and family-run businesses. The owner may rely on the business for their household income, and there may be little spare cash if sales fall. With fewer customers and less access to finance than a large business, one unexpected cost can quickly become a serious problem.

Why it matters in a small business

• Thin cash reserves: a small business may have little saved to pay rent, insurance or wages during a slow period.
• Owner's income at risk: a sole trader or family may have their own money tied up in the business, so unstable finances create personal worry.
• Less room for shocks: a broken fridge, a late-paying customer or a competitor opening nearby can be harder to absorb.

For example, a family-run mobile bike repair service might aim to keep £1,500 in its business account as a buffer and to have enough booked repairs each month to cover fuel, tools, insurance and the owners' wages. In a quiet winter month, the buffer pays fixed costs and reduces the worry of borrowing emergency money. That is financial security: stable enough finances to keep going, not simply the biggest profit.

A social objective is one of the non-financial aims a business can set: an aim to improve the lives of other people or benefit a cause or community. It is about making a difference, not just making money, so it can motivate an owner even when profit is modest.

Social objectives can shape what a business sells, who it employs and how it spends its money. For example, a business might aim to employ people who find it hard to get work, offer lower prices to a group that needs support, or give part of its income to a local project.

Profit and social objectives

A social objective does not mean the business cannot make a profit. A business still needs revenue to cover its costs or it will not survive, and any profit can be reinvested — put back into the business or the cause — to support the social goal. Profit might pay for training, better equipment or free sessions for the community, rather than being taken out by the owners.

Take Print Pals, a small printing company that employs adults with learning disabilities and runs free CV workshops. In one month it makes £2,000 profit. The owner puts £1,200 of that profit towards a new printer and £800 towards materials for the free workshops. Print Pals has made a profit, but its social objective has guided how that profit is used.

Challenge is a non-financial aim: the owner starts a business to test themselves, solve a problem or fill a perceived gap in the market. The reward is not mainly money. It is the sense of achievement from doing something difficult, proving an idea can work or making a difference to customers.

A perceived gap is a gap the owner believes exists, even though it may not yet be proven. For example, someone who repairs bicycles notices that riders of adapted tricycles struggle to find a local mechanic. They start a mobile repair service aimed at that group. The challenge is to solve an overlooked problem and see whether the service can attract enough customers. The owner may enjoy learning a new market, designing the service and persuading people to try it.

Challenge can affect business decisions. An owner driven by challenge may choose a difficult product, an unusual customer group or a market where other businesses have failed, because the difficulty itself is motivating. They may judge success by whether the problem is solved or the idea is proved, as well as by the money made. A challenge aim does not mean money is ignored: the owner still needs enough income to keep the business running, but the main pull is the test or the problem being solved.

Two owners can sell exactly the same product yet want completely different things from their businesses. Aims are the broad goals an owner has for the business. Objectives are the specific, measurable targets used to reach an aim and to check progress. Because people start businesses for different reasons, their aims and objectives differ too.

Money and more than money

Financial aims are about money and financial performance: survival, profit, sales, market share and financial security. Non-financial aims are about rewards that are not money: personal satisfaction, challenge, independence, control and meeting social objectives. Many owners want a mixture of both. Someone who turns a cake-decorating hobby into weekend orders may mainly want personal satisfaction and independence, choosing their own hours, yet still set a sales objective of selling ten cakes a month so the hobby pays for itself.

Why owners set different goals

• Motives and values: one owner pushes for profit or a bigger market share, while another runs the business with a social purpose and reinvests profit in a cause. Some simply want an outlet for a hobby or a special interest.
• Personal circumstances: a parent of young children may aim to stay small and local, serving a limited number of customers, while someone free to travel may aim to sell overseas.
• Type, size and market: a new taxi firm facing four established rivals in the same town may aim for survival first and market share later, whereas a one-person picture-framing workshop may care most about financial security and staying in control. The market and the competition a business faces both shape what seems worth aiming for.

One business can hold several aims at the same time, each backed by its own objectives. A small board-game shop might aim for survival, with an objective of covering its rent each month, and aim for challenge, with an objective of hosting a regional tournament each year. Not every business aims to maximise profit, and recognising that helps you explain the choices an owner actually makes.