Whilst businesses are established to attempt to realize the personal goals of the owners, there are other important goals that a business will strive to achieve during its operation. These goals include financial, social and environmental goals.

Owner’s Personal Goals

Many businesses are established to realize the ambitions of the owner or owners. These goals can include satisfaction and a sense of achievement, power and status, being independent, having a comfortable and secure lifestyle, and making a positive contribution to improving the local community.

If the personal goals of the owners change, then the other goals of the business will change as well. For example, if the owners wanted a higher income from the business, the financial goals of the business will need to be revised so that the business can direct more of its income to the owners. If the owners decide to help the local community by sponsoring a community event, the social goals of the business will be widened to take that sponsorship into account. This means that the personal goals of the owners are the most important ones for the business and the other business goals will be adjusted so that the personal goals of the owner or owners of the business will be achieved.

Financial Goals

Financial goals cover a range of goals that may include maximizing the wealth of the owners through improved profits, long term market growth and being a market leader. Other financial goals may relate to achieving a desired cash flow and liquidity.

Profit is not the only measure of success. Owners expect a return on capital they have invested. This return must at east equal what they could have received from investing the funds elsewhere. Thus, profit is important but there are other goals that need to be considered in order to achieve a revenue depends directly on the amount of sales that the business makes. One way that a business can increase its sales is to increase its market share. Market growth and market leadership are therefore regarded as financial goals.

Social Goals

These goals refer to the role of a business in the community in which it operates. Businesses like to have a positive image in the community and often try to achieve this by giving something to the community.

Businesses employ staff and in doing so provide opportunities to people for personal growth and achievement. The management of personnel is vitally concerned with allowing employees to reach their full potential as they contribute to the operation of the business.

Environmental Goals

Environmental goals refer to using resources efficiently yet minimizing the impact on the environment. This enables ecologically sustainable development which is the balancing of the creating of goods and services with environmental usage and impact. If a business pursues this goal, it will leave the environment in the same or better condition than before the business began operating. Businesses today are becoming increasingly concerned about world environmental problems and because of stricter laws, they are reducing pollution and conserving resources.

Suggested Reading:
+ Assets, Liabilities and Owners Equity
+ Debt Financing and Equity Financing
+ Marketing Plan, Market Analysis and Sales Forecasting In A Business Plan
+ Types of Business Ownership, Their Advantages and Disadvantages

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Tags: Business, Goals of a Business