GCSE Business

Business Activity
Why do some businesses decide
to remain small?
Business Aims and Objectives • Some business owners do not want
to grow / are content to operate as I N T ER N A L EXTERNAL STAKEHOLDERS
Aims and Objectives a small business ➔ without all the S T A KE H O L D ER S SUPPLIERS
stresses and strains associated with a SOCIETY

Aims: Is the long term objective of the business. Its aim might be growing business ➔ examples such as; EMPLOYEES
to become the biggest business in its sector. financial limitations, access to resources, GOVERNMENT
management etc.
Aims should be SMART: MANAGER COMPANY
• Small businesses can survive on a

M A
CREDITORS

S R T
relatively low cost structure ➔ may
OWNERS
operate from home ➔ have no stock
holding costs etc. SHAREHOLDERS
CUSTOMERS

• Some serve niche markets and there is

SPECIFIC MEASURABLE ACHIEVABLE REALISTIC TIMED no scope for growth ➔ the market may
not be possible to expand
Stakeholders
Specific – Measurable – Attainable – Realistic – Time Manageable • Many services can be delivered more
effectively on a small scale ➔ e.g. Definition: Individuals and organisations who
Objectives: Is a short or medium term target of a business needed hairdressers, personal trainers, etc. are affected by the decisions and actions of a
to reach its aim. An objective might be to increase sales by 20% in particular business
the next 5 years. • Some consumers like to purchase goods
from specialist suppliers and outlets • Customers ➔ best quality / design /
Aims of For Profit Organisations: AIMS / small stores ➔ they may provide material from products bought ➔ may not
• Survival something unique / provide a personal buy the product
• Profit maximisation service which some larger organisations • Workers ➔ fair treatment / pay / conditions
• Increase sales revenue / sales maximisation struggle to achieve ➔ may not be able to find employees ➔
• Increase market share / gain more customers / customer base hard working ➔ skilful
• Growth / expansion / diversification / multinational • Small businesses can adapt quicker • The government ➔ payment of taxes /
• Improve reputation / increase brand awareness than large businesses ➔ adapting to keeping to various laws may add to costs
• Improve quality / satisfy customers change quickly such as technology, • Pressure groups ➔ ethical source of
• Environmental / ethical aims fashion ➔ more able to satisfy customer materials / treatment of workers / the
• Provide jobs / community aims needs effectively than a cumbersome plc environment ➔ may effect way business is
seen / costs / profits
Aims of Not-For Profit Organisations: • Local community ➔ pollution / congestion
• To serve the community / ethical aims / environmental / social ➔ effect on demand
objectives/ provide jobs • Suppliers ➔ prompt payment / ethical
• To provide services treatment ➔ may not be willing to supply
• To avoid wasteful duplication of resources where a natural SMALL BUSINESS • Lenders / investors ➔ repayment of debts
monopoly exists, such as rubbish collection and beach / interest ➔ may call in debts ➔ closure of
cleaning. - N IC HE M A RKET business
• To control strategic industries. - O P ERA T E FRO M HO M E • Owners ➔ decision making effects on the
• To prevent exploitation by monopoly suppliers. - A DA P T Q U IC KER business/examples
• To help people in need. • Competitors ➔ price wars