Before starting your business, consider carefully what your business objectives will be. Business objectives relate to your business as a whole and are your vision of what your business will achieve. These objectives should also be both long and short-term.Short-term objectives will relate to what you want to achieve in the next 12 months, long-term objectives to what you will want your business to achieve over say, the next five years. You should not confuse business objectives with marketing objectives. Your business objectives are the primary objectives of your business, marketing objectives entirely secondary. Until you have set the overall strategy for your business with appropriate business objectives you cannot consider your marketing objectives.When you consider any objectives for your business you should ensure that they meet the ‘SMART’ criteria.
Setting Smart Objectives
All of the objectives that you set for your business must be:
- Specific
- Measurable
- Agreed
- Realistic
- Timed.
For a new business, your business objectives will probably be few in number. In your first year of trading your only objective may be to make sufficient profit to enable you to achieve a decent standard of living. As the business grows, the number of objectives will probably increase. These could cover such areas as:
- achieving increased profitability
- reducing overhead expenses in relation to sales
- achieving greater production efficiency
- making greater use of technology to improve communication.
All of the above are singular in nature, i.e. they are objectives that have only one component. You may also set objectives that link various parts of your business. For example, consider the following hypothetical objective for a distribution business:
Having set the objective you’ll then need to state exactly how you aim to achieve it. Effectively, you link the objective to a strategy. Continuing with the same hypothetical example this might read:
As you can see, this objective meets all of the SMART criteria. It is quite specific, it is clearly measurable in terms of delivery days, it is
agreed and realistic and it is timed, the improvement to take place over a maximum 12-month period.
Having now added the strategy it is also clear how the objective is to be achieved, i.e. with the use of a new distribution system which takes advantage of the latest technology to control the order, stock and delivery system.
Having A Clear Mission Statement
The best way to quantify your business objectives is through a mission statement. Sometimes referred to as a vision statement, it will detail the whole point of your business. In many ways this is the hardest part of your business strategy to write because it must outline succinctly the whole thrust of your business.
The mission statement is also the most misunderstood part of the business planning process. Many people think that it should be couched in eloquent language and be full of lofty ideas for the business. All too often it becomes pompous, with little meaning and purpose because it is largely incomprehensible to those who read it.
The Four Key Components Of A Mission Statement:
- The role or contribution that the business makes – is it a voluntary organisation or a charity? Are you in business to supply goods and services and make a profit?
- A definition of the business – this should be given in terms of the benefits you provide or the needs that you satisfy. It should not define what you do or what you make. These should have been outlined as part of the first component.
- An outline of your distinctive competencies – the factors that differentiate your business from the competition. These will be the skills or capabilities you offer that are not, or cannot be, offered by your competitors.
- The indications for the future – what the business will do. What it might do in the future and what it will never do.