Edexcel GCSE Business

UPDATED

Theme 1: Investigating
Small Business

Topic 1.3

1.3.1 Business aims and

objectives
Worksheet
 From Edexcel
• What business aims and business objectives are

• Business aims and objectives when starting up:

• Financial aims and objectives: survival, profit, sales,
market share, financial security
• Non-financial aims and objectives: social objectives,
personal satisfaction, challenge, independence and
control

• Why business aims and objectives differ

between businesses
 Lesson objectives
• To be able to identify what business aims and
objectives are
• To be able to discuss what business aims and
objectives are when a business starts up
• To be able to discuss why aims and objectives
differ between businesses
 Starter
• What goals do you have in your life?
What business aims
and business
objectives are
Definition: Aims and objectives
• Aims are the strategic goals of a business; for
example to grow
• Objectives are more specific steps; for
example to increase market share by 5% over
the next year
Why does a business set aims and
objectives?
A. Setting business objectives
gives specific targets by
which business
performance can be
measured
B. Setting objectives can be
used to motivate workers
C. Setting objectives clarifies
business direction and aids
decision making
Business aims and
objectives when
starting up
 Financial business objectives
• There are lots of possible financial objectives for
a business when starting up. These are the ones
that the exam board would like you to know:
1. survival
2. profit
3. sales
4. market share
5. financial security
Get ready to make some notes on these objectives on the
next few slides
#1 Survival as an objective
• In its first year of trading a
start-up business may aim
to just survive while it
builds a customer base and
establishes itself in the
market
• Watch the video – at what
point did the business
decide to go permanent?
• What advantages do you
think starting a pop-up has
to starting a normal
business?
#1 Survival as an objective -
continued
• The objective is to reach a
sustainable level of sales
that allows the business
to reach its break-even
point
• This may not mean much
profit in the first instance,
but when the business
starts to grow it will able
to comfortably raise Start video at 7:47, Malcom
has to calculate the break
prices to the best level even number of trees that
they need to sell
#2 profit as an objective
• Profit is total revenue
(money into a business)
minus total costs (money
out of a business)P=TR-TC

• A business will aim to

maximise profit, they
must do this therefore in
two ways:
– Increase revenue into the
business
– Reduce costs out of the
business
#3 Sales as an objective
• In the first year of a new
business, one of the
objectives might be to
grow the sales within the
business
• For example a new online
shop may wish to keep
prices low to stimulate
sales
• Once customers have
tried the products they
may come back and buy
again
#4 Market share as an
objective
• A business may aim to
increase their market share.
This is the percentage of
sales held by a business in a
market e.g. 45%
• They will have to take sales
away from competitors to
achieve this aim
• This could be done through;
– Heavy promotion and
discounts
– Differentiation of the
products
– Adding value to the products
#5 Financial security as an
objective
• If an entrepreneur has
opened a new business
they may have given up
another regular paid job
• This means the
entrepreneur may need
the business to make
money to pay their bills;
gas, electric, mortgage,
loans, credit cards etc.
• The business will need to
give the entrepreneur
financial security
Non - financial business objectives
• There are lots of possible non-financial objectives for a
business when starting up. These are the ones that the
exam board would like you to know:
1. social objectives
2. personal satisfaction
3. challenge
4. independence
5. control

Get ready to make some notes on these objectives on the

next few slides
#1 Social objectives
• Social enterprises are
businesses trading for
social or environmental
purposes
• Many businesses would
consider themselves to
have social objectives, but
social enterprises are
distinctive because their
social and/or
environmental purpose is
absolutely central to what
they do
Suggested activity
•Carry out some research
into social enterprises
• What is a social enterprise?
• How does a social enterprise
differ from a charity?
• Choose a social enterprise from
the list below to make a poster
about:

Jamie Oliver 15
Eden Project
Big Issue magazine
Cafe Direct
The Big Lemon
Birdsong London
Divine Chocolate
#2 Personal satisfaction

• An owner of a new
business may have
wanted to get personal
satisfaction from
starting a business
• Working for yourself
can be very satisfying,
and give the business
owner a sense of
achievement
#3 Challenge
• Some entrepreneurs
may start a business
and want a challenge in
life, perhaps the idea of
a regular 9-5 job does
not appeal or suit their
personality
• Does your school /
college day challenge
you?
#4 Independence
• An entrepreneur may
wish to have
independence, so they
don’t have to work for
someone else
• If they start their own
business, they will be
able to make all their
own decisions
#5Control
• Entrepreneurs may wish
to have more control over
their own working lives
• Owning a business gives
more flexibility in terms
of; days off, holidays,
working hours etc.
• They also get to have
control over the business;
what products or services
are sold, where they are
sold and how they are
promoted
Why business aims
and objectives differ
between businesses
Private sector objectives
• Manufacturers, retailers,
banks, architects, builders
owned by private investors
(not the government) are in
the private sector

• Their objectives are likely to

be:
– Maximise profits by
increasing sales and reducing
costs
– Increase market share
– Expand the business
Public sector objectives - continued
• The BBC, Met Office, Royal
Mint, state schools, NHS
hospitals are all owned by
the government and so are
in the public sector (think of
it as owned by the
government for the benefit
of the public)
• Their objectives are likely to
be:
– Meet customer targets, e.g.
lower patient waiting times
– Keep costs low
Not for profit / voluntary sector
• Community groups,
charities, e.g. Help the Aged
• Social enterprises, e.g. Big
Issue

• These types of
organisations might have
these objectives:
– Increase revenue from
donations
– Reduce costs
– To provide for those in need
Different businesses have different
objectives

Do you think these businesses have the same objectives?

What do you think their objectives are?
Different businesses have different
objectives

Do you think these businesses have the same objectives?

What do you think their objectives are?
Different businesses have different
objectives

Do you think these two businesses have the same

objectives? What do you think their objectives are?
Sample Exam Questions
Sample question 1
 Answer question 1
• Answer is D all the others are financial
Sample question 2
 Answer question 2
• Answer is C all the others are non-financial