I once observed my local grocery vendor pushing all his customers to buy rice. He said that he was determined to sell the rice and finish half of his stock. With this objective in mind, he started offering a free soap on purchasing a kilo of rice and a detergent box on the purchase of five. Lured by his offers, the customers ended up buying rice including me. This got me thinking about how objectives are set by different businesses differently. His objective here was to sell as much rice as possible to achieve his goal of finishing his stock.
Defining business objectives
The textbook definition of business objectives is simply a result that a company aims to achieve. Any business sets objectives and strives to achieve them within a stipulated time and available resources. The business objectives of your company paint the picture for you on how you can achieve your business goals. When you are setting a business goal, the next step would be breaking it into objectives. It is essential to ensure that the objectives are in alignment with the goals and do not clash in the long or short term of the business. People often use the term goal and objective interchangeably. However, in the business world, their meaning differs a lot.
It is essential to ensure that your business objectives and goals are aligned.
Business goals vs objectives
In the business world, a goal is quite different from an objective. The goal of your business will be the vision of where you want your company to be and it will provide you with the direction. While objectives will help you take actions and steps that will help you achieve those goals. Goals are usually long-term in nature. On the contrary, objectives are usually mid-term or short-term that help to achieve goals in the long run. To make the goals set by you actionable, they need to be broken down into objectives.
Fundamental types of business objectives
Objectives reflect the reason why the business started. They reflect the results a company wants to achieve. With time, the objectives of a business evolve as well. There are several types of business objectives to keep various business units satisfied. The obvious one is making profits. However, profits cannot be achieved and sustained in the long run when the interests of various components of a business are ignored. Read on to know about the fundamental types of business objectives.
Anything and everything that has to do with making money in the business will fall under economic objectives. Profit is the crux of any business, without which it cannot survive. Profit-making is a primary objective of any business. Without profits, businesses cannot sustain, grow or expand. Gaining enough profits will help you meet other objectives of your business too. Another economic objective is generating customers. To run a business, the products or services are needed to be sold. To achieve this objective, quality products should be available at reasonable price points. Apart from profits and getting more customers, continuous innovation is much-needed to survive in any business. To have a competitive edge over others, improvements and innovations are needed in the production, distribution and marketing channel.
A business uses various resources of the society and in return, some objectives are needed to be set for benefiting the society. The goodwill of a business is directly related to how in harmony it functions with society. Customers are a part of society, the products and survives bought by customers should meet the quality standards. Selling adulterated or products with harmful ingredients will hamper the community at large. Adopting fair trade practices is another social objective that cannot be ignored. Adhering to fair trade practices is non-negotiable if you want to sustain your business. Also, using the revenue earned by businesses for the development of the community is another social objective. You can contribute to the general welfare of society by donating to schools, colleges or hospitals. Having plantation drives, beach cleaning or visiting old-age homes are some great ways of involving your employees in the welfare activities of your organisation.
Human objectives refer to the human aspect involved in your company, your employees. It is essential to provide fair remuneration along with a good work-life balance. Along with that performance incentives, medical facilities and provident funds are some additional ways to keep the employees satisfied. Employees are the asset of any company, the more satisfied they are with their jobs, the better they perform, the more the business grows. It is important to allocate the right job to the right person along with training to harness any skills if needed. Taking employee feedback seriously and addressing their problems will lead to employee satisfaction.
The objectives of a business should be on the same lines as national objectives. Providing employment opportunities in the country is one such prominent objective. When a business expands be it by having more business units or expanding markets, more people are needed. Here again, the business objective of making profits directly impacts the national objective, As funds are needed for growing and expanding any business. Social justice is another objective a business must adhere to. This is in regards to treating all employees equally irrespective of their caste, religion or socio-economic background. Paying taxes and dues with utmost honesty is another national objective a business must adhere to.
Your goal is like your destination and objectives will show you the steps to reach that destination.
Whether a business is small or a multinational corporation, it does have a global impact on some levels. As every small business in a region functions, in the same manner, pooled together these small businesses will have a huge impact. Also, every small business has the potential to be global eventually. A global objective of business should be to make products and services that can cater to the international market. Also, businesses should be focused on reducing the global disparity between the rich and the poor along with raising the overall standard of living.
Organic objectives are those which will help the business to expand and grow in the long run. Strengthening the business by reducing debt and raising self-reliant capital is an objective one can set. Implementing schemes of growth and expansion, carrying research and development for innovation, enhancing the image of the company, and expanding business units are examples of organic objectives a company may set for itself.
How to set objectives for your small business or start-up?
The business objectives you set should be aligned with the core values and goals of your business. Without having clear goals for your business, you cannot set objectives. Your goal is like your destination and objectives will show you the steps to reach that destination. Your business goals should drive you towards relentlessly working towards them. The goals cannot be vague or without any stipulated deadlines.
Once the goals are clear, it is time to take action. Here is where the objectives are set. When you are starting a new business or functioning an existing one, here’s how you can set objectives for it:
Consistent with the value and goals of your business
You don’t want to set objectives for your business that do little or nothing with your goal. It is easy to get sidetracked when several things need your attention. As an entrepreneur, your plate is always full. An easy way to determine if your objective is worth your time and energy are simply by observing if it brings you closer to your goals or not.
Create a detailed plan
Planning is the foundation on which your implementation depends. Think of all the actions you need to take to achieve your objectives. Brain dumping is of great help here. Also, think about several ways to achieve the same objectives. Now that you have listed it all, think over it. Choose the best action plan that suits your objectives and keep it as detailed as possible. The more details you map out, the easier it would be to implement the action plan.
Put everything on the calendar
If things are not time-bound and lack deadlines, slacking off and drifting from the tasks is easy. If you want to achieve your objectives, you need to schedule an action plan with a set timeframe. Having timeframes gives a much-needed sense of urgency. As objectives and goals evolve with time, it is potent to schedule the action plan.
Getting into action
Once you have set the objectives, it is time for action. Anyone and everyone in the organisation involved in the action plan should complete the tasks and duties in their hand. Teamwork plays an important role here as effective action is needed towards every step of the plan. Without the right actions, the action plan is a mere piece of paper.
Business objectives reflect how a company meets its goals. The more precise and well-identified your business objectives are, the more likely your business will grow. When your objectives are measurable and you are tracking progress, you will know how much you have progressed. This will help to know the areas that need attention and areas that are your strengths.