When you start a new business you will need SMART Business Objectives. Business objectives can be split into two groups;
Lets discuss each of the groups below.
The diagram below divides objectives for new businesses into two groups; financial objectives and non financial objectives.
Lets discuss each of the groups below.
Survival: When a business first sets up the objective is to survive. This is a very important objective as a large percentage of new businesses close within two years of opening. In order to increase the chances of survival businesses will need to carry out detailed research, analysis and planning prior to implementing any form of marketing including creating their marketing mix.
Profit And Income: In order to survive businesses have to generate an income, this includes businesses that are not for profit. This is because an income (revenue) will provide the business with the funds it needs to carry out its activities. Read this article if you would like more information about cash flow, business costs and revenue.
Wealth: A successful business will generate wealth. Wealth can be used to reinvest in a business to expand and grow, Organisations like Google, Facebook use their wealth to further expand their business interests enabling the business to be further routed and established. For example the wealth generated by Facebook has enabled it to buy the communication application (app) Whatsapp
Security: A full time job gives you security. Setting up your own business is risky and you do not have the guarantee of a stable monthly income as sales will fluctuate.
There are non financial objectives to setting up your own business these include:
Personal Satisfaction: A successful business will provide the parties that created and built the business with a sense of satisfaction.
Overcoming Challenges: Enjoying the challenge. Some people may enjoy the daily challenge of setting up your own business.
Achieving Independence: The feeling of being independent. You do not report to anyone as you are your own boss
Effective Control: When you run your own business you control your own destiny. You have to put in hard work, determination and be focussed if you are to succeed and make sure your destiny is a success.
A large percentage of new businesses fail in the first year of trading so its important to set SMART Business Objectives to increase the chance of success. Financial business objectives will provide the money a business needs to set up and grow, whilst non financial business objectives provide the firm with the motivation need to establish and maintain a business.
