Objectives of Business Startups

The first objective of a start-up business is to prepare it for trading. This can often take longer than the entrepreneur expects - finding premises, suppliers, specialist help, finance e.t.c. will take up a lot of time and resources. Once the business is up and running, the firm will look at least to survive the first few months (where a sound cash flow is essential!). Once established a business may look to increase its market share, which in turn should lead to increased profits for the business. This profit can then be reinvested in the business and the new business objective may become to grow the business over the medium term.

How do businesses set their objectives?

The objectives of a business varies depending on the people and circumstances involved:

  • Is the business crucial as an income for the entrepreneur? Failure may mean bankruptcy and loss of assets such as a house.
  • Is the business something that the entrepreneur wants to undertake due to personal satisfaction? Some people are not starting a new business with the sole aim of making a profit.

People set up businesses for a variety of reasons and it is important to recognise that profit is not always the most important factor.


A business might be started for any number of reasons by the entrepreneur. The business that results is going to have the entrepreneur's personality and values stamped all over it. This means that the objectives of the newly created business are likely to be dominated by things important to the entrepreneur as well.

Business objectives look at the ambitions of the start-up firm. Most firms will base their objectives on the SMART acronym:

  • Specific - exactly what does the firm wish to achieve?
  • Measurable - can the firm measure whether the objective is being met?
  • Achievable - are the objectives set attainable?
  • Realistic - given the resources available are they a realistic target?
  • Time-Based - by when should the objectives be met?

Start Ups Can Be Risky

There are a number of reasons why start-ups might be risky. The different areas that can affect new businesses are:

  • Finance - investment and cash flow are vital for a business. Without an adequate supply of cash the business will fail
  • Marketing - it is important to look at the elements of the marketing mix
  • Human Resource Management - who are the people involved in the business?
  • Operations Management - are resources turned into output by adding value?
  • External Influences - what is the state of the economy? Credit crunch Britain may not be the best time to start a new business!

Unfortunately most people that have good business ideas and plans never go beyond the thinking stage. So how can an entreprenuer get an idea of whether to go ahead with a business plan? Using SWOT analysis can enable a firm to look into its **Strengths**, **Weaknesses**, **Opportunities** and **Threats**, and therefore get a better idea of where the business could go.

Factors That Can Cause Businesses to Fail

Bearing in mind the risks, there are a number of common reasons why start-up businesses fail:

  • Market Research - Inadequate market research to understand the market
  • Marketing - not keeping a close eye on the competition in the market or promoting the product in the right manner.
  • Finance - poor financial planning
  • Human Resources Management - hiring the wrong people with the wrong skills
  • Operations Management - poor control of stock, assets and supplier relationships
  • Finally, many start-up businesses are simply just not realistic about their ideas and objectives.


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