Setting business aims and objectives study guide

The total value that shareholders receive from owning a company, usually measured by share price and dividends.

A specific, measurable, time‑bound target that a business sets to achieve a broader aim.

Competition refers to the rivalry between businesses that offer similar products or services to the same market.

A specific, measurable goal that a business aims to achieve within a set timeframe.

A measurable value that demonstrates how effectively a company is achieving key business objectives.

Exam practice

• Which of the following is the most important aim for a new start‑up business?
• A small manufacturer records the following for the year: revenue £120,000, fixed costs £30,000 and variable costs £50,000. Calculate the profit and the profit margin. Show all working.
• Which of the following best describes the primary purpose of setting objectives in a business?
• Explain how setting clear objectives can influence decision‑making in a small manufacturer.
• Which factor is least likely to influence a small online service business's objectives?
• Evaluate how competition influences the objectives of an independent retailer.
• Why might a business change its objectives as it grows from a start‑up to a larger established company?
• Explain why objectives may change as a business evolves from a start‑up to a larger established business.
• Which of the following is NOT a common non‑financial measure of business success?
• Explain how an online service business can use customer churn rate as a success measure.