PART OF THE REVISIONSTATION TEACHING RESOURCES PACK FOR EDEXCEL IGSE BUSINESS Businesses can have several objectives: • financial aims and objectives - survival, profit, sales, market share, financial security • non-financial aims and objectives - social objectives, personal satisfaction, challenge, independence and control.

1. 1.1.1 Businesses can have
several objectives

2. You will need worksheet 1.1.1 for this lesson

3. Lesson objectives
• financial aims and objectives:
• survival
• profit
• sales
• market share
• financial security
• non-financial aims and objectives:
• social objectives
• personal satisfaction
• challenge
• independence
• control

4. Starter
• What goals do you have in your life?

5. 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

6. Why does a business set aims and
objectives?
• Setting business objectives gives
specific targets by which
business performance can be
measured
• Setting objectives clarifies
business direction and aids
decision making
• Setting objectives can be used to
motivate workers – why?

7. Financial aims and objectives

8. Financial business objectives
introduction
• 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

9. #1 Financial objective: survival
• In its first year of trading, a
business may aim to just survive
• This means that the business
owner just aims to trade for a
year, possibly to “see how things
go”
• When the business is more
established the objective might
change

10. #1 Survival continued
• Having the objective of survival
means that the business owner
would want to reach a
sustainable level of sales, which
will allow the business to reach
its break-even point. This can
mean keeping prices low
• This may not mean much profit
at first, but when the business
starts to grow it will be able to
comfortably raise prices

11. #2 Financial objective: profit
• Profit is total revenue (money
into a business) minus total costs
(money out of a business)
• The formula is P=TR-TC
• A business will aim to maximise
profit, they must do this
therefore in two ways:
1. Increase revenue into the
business
2. Reduce costs out of the business

12. #3 Financial objective: Sales
• 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

13. #4 Financial objective: Market share
• A business may aim to increase
its market share. This is the
percentage of sales held by a
business in a market.
• They will have to take sales away
from competitors to achieve this
aim
• This could be done through:
1. Heavy promotion and discounts
2. By making the products look
more appealing

14. #5 Financial security as an objective
• If an owner has started a
business they may have given up
another regular paid job to do so
• This means the owner 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 owner financial security

15. Non-financial aims and objectives

16. Non-financial business objectives
introduction
• 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

17. #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
• Have a look at the Mecoco
website – what is their social
objective?

18. 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:
Big Issue magazine
Cafe Direct
The Big Lemon
Divine Chocolate
Choose one of your own to study

19. #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
• Why would personal
satisfaction be a non-financial
objective of a business?

20. #3 Challenge
• Some owners may start a
business and want a challenge in
life, perhaps the idea of working
for someone else does not
appeal
• Some owners want to start a
business to see if they can create
something new that makes a
profit and will give them fresh
challenges every day

21. #4 Independence
• A business owner may wish to
have independence, so they do
not have to work for a company
• If they start their own business,
they will be able to make all
their own decisions
• This means they cannot be fired
and they can take holidays when
they want to
• Which of these factors do you
think is the most important?

22. #5 Control
• Owners 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

23. Look at these six different types of business. What do you think their main objective would be? What
legal forms are these businesses? Does the size of the business have an impact on the objective they
choose?
A B C
D E F

24. Plenary Quiz
• Can you identify if these business objectives are financial or non-financial?
1. Survival
2. Personal satisfaction
3. Profit
4. Challenge
5. Sales
6. Independence
7. Market share
8. Financial security
9. Control

25. Plenary Quiz Answers
1. Survival FINANCIAL
2. Personal satisfaction NON-FINANCIAL
3. Profit FINANCIAL
4. Challenge NON-FINANCIAL
5. Sales FINANCIAL
6. Independence NON-FINANCIAL
7. Market share FINANCIAL
8. Financial security FINANCIAL
9. Control NON-FINANCIAL

27. Case study for sample question 1

28. Sample question 1

29. Answer question 1
• Correct answer is C
• Why???
• All the others are non-financial reasons

30. Case study for sample question 2

31. Sample question 2

32. Answer question 2

33. Sample question 3

34. Answer question 3
• The correct answer is D
• Why???
• All the others are financial objectives

35. Sample question 4

36. Answer question 4
• The correct answer is B
• Why??
• All the others are non-financial objectives