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1.5.3 Business objectives & 1.5.4 Forms of business Typeit
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An objective is a goal or an of a business: what it wants to achieve. A is how the business achieves its objectives.
The main objective of businesses that have just started is to . This is a short-term objective and aims to ensure that the business continues to trade.
Once the business is established it will aim to its profits to provide the necessary capital to grow and expand. If the business wants to increase production, it may need an injection of in order to buy new machinery, so that it can automate some of the production process.
Depending on the nature of the business and the it trades in, it may have a wide range of other objectives.
The profit formula is TR – TC where TR is Total and TC is Total .
Some of the other objectives directly support the profit maximisation objective of the business. For example if the business aims to maximise its profits then it may look to maximise its , which would be increasing its total revenue (TR). It may also look to increase its cost in order to lower its total costs (TC).