What are the main objectives of a business?

The term ‘business’ refers to all economic activities pursued mainly to satisfy the material needs of society, with the purpose of earning profits.

Such activities include exchange of goods and services on a regular basis and carry an element of risk and uncertainty.

Manufacturing, trading mining, banking, transport, insurance, etc, are all different types of business.

Objectives of a Business

Every business functions with certain set objectives in mind. Every business has a goal that it tries to achieve in order to remain in the market and earn revenues. The objectives of any business are as follows:

Mrs. Miceli's Business Courses 14-15

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a) Profitability:

Profit making is the main, but not the only objective, of any business. It is also the primary unit or yardstick of measurement of performance and efficiency of a business.

The performance of any business is judged mainly by its profit margin and revenues.


Although maximization of profit may not be aimed in the short run, every business aims at wealth maximization in the long run by earning good profits.

b) Growth:

After earning sufficient profits, every business aims at increasing returns in future to ensure growth of business with time.

Growth can be seen in terms of increase in profits and assets, turnover, manufacturing capacity, market share, number of employees, business acquisitions, and so on.


c) Efficiency:

It is very important to achieve goals efficiently to ensure attractive profits and other qualitative aspects related to the business.

It is an operational objective and measured in terms of input-output ratio, consumption of resources, efforts made, etc.

d) Survival:

It is not necessary for a business that is currently in the market to remain there in the long run. The longevity of a business is not sure.

Therefore for a business to remain in the market it is necessary to ensure its survival to protect the interests of those associated with it.

Survival depends upon many internal and external factors like competition, technological changes, state of economy and type of ownership.

e) Stability:

Every organization aims at stable and consistent working. A business must be able to fulfill its objectives without much tensions and fluctuations in day-to-day operations.

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