What is a business objective? Definition and meaning

A business objective is a result that a company aims to achieve. Such objectives act as vital benchmarks for the organization to assess its progress and strategic direction. It also includes the strategies that people will use to get there. A business objective usually includes a time frame and lists the resources available.

The adjective – to be objective – means not to let personal feelings or prejudice affect you when considering something. For example:

“We need to be objective when confronting this problem – this is not a time for personal bias.”

The opposite is to be subjective.

Business objective vs. goal

A company’s goals and objectives are not the same. The goal includes a broad primary outcome. A business objective, on the other hand, is a measurable step people take to achieve that goal. Goals are general while objectives are specific.

Business objective versus business goal - image

A company’s business objectives provide a picture of how it plans to achieve its goal. It also states how long it will take, and what resources are available. A business goal is vague in comparison.

When we plan our business’ future, we generate a list of potential achievements. We call these the goals. The actual steps we plan to take get to those achievements are the objectives.

You will often hear these two terms in business situations: “Our goals and objectives are…” or “Our aims and objectives are…” In a business context, ‘aims and goals’ might have the same meaning.

People commonly use the terms ‘goals’ and ‘objectives’ interchangeably. However, they are not the same. Business objectives and goals have important differentiating attributes which we use at different stages of the planning process.

  • Objectives are specific – goals aren’t

A business objective is more specific and easier to measure than a goal. All our basic tools that underlie our planning and strategic activities are our objectives.

Our objectives serve as the basis for creating policy and gauging performance.

Goals vs Objectives
In business, your goals are where you aim to be one day. Your objectives, on the other hand, describe how you plan to get there.

For example, making a profit is a business objective. Reducing the workforce, expanding abroad, or minimizing expenses are also business objectives. Expenses are what the business spends. Keeping track of your expenses and outgoings can be a real chore. Some business bank accounts, like Monzo, make that easier with features automatic tax pots for setting aside costs for VAT, etc.

Goals are statements a business makes regarding its future. They represent the aspirations its leaders have.

The CEO of a company may say: “We seek to become the largest maker of bicycles in the world.” This is a goal because the person does not explain how the company will achieve this.

The exact steps a company plans to take to reach its goals or aims are its business objectives. When expressing the objectives, the CEO might say:

“We will increase our sales of bicycles by 2.5% each quarter of this year. We will open new branches and factories in Germany and France during the next twelve months.”

Business objectives – small companies

Defining objectives and goals assumes great significance when selecting a great idea for a small business. Nowadays, we have scores of small business ideas that require an only online presence. While planning a fully online venture, defining objectives and goals is imperative since they decide the future trajectory of the business.

The main objectives of a small or very young business might be:

  • Profit Maximization

Profit maximization means making as much profit as possible. In fact, everybody has this business objective.

  • Survival

Survival is a short-term business objective. When you have a start-up company, staying alive is uppermost in your mind.

Survival is also a priority for small or young companies when there is an economic crisis. In fact, it is also a priority for many large corporations. An economic crisis is a situation in which the economy takes a sudden and severe downturn.

  • Profit satisficing

Profit satisficing means making enough profit to keep the owners happy. It is a common strategy in small businesses in which the owners do not work in the company.

Satisficing means being happy with ‘good enough’ rather than striving for the best possible option.

Imagine you don’t work at your company. You have managers working for you. What should you do if you want them to do more than just make you happy? You should offer them a stake in the business.

  • Sales growth

With sales growth, a company gets larger. Most people want their company to grow. In fact, some believe that growth is the only route to survival.

Furthermore, the bigger a company, the more it can benefit from economies of scale.

A key objective for expanding companies is to innovate, ensuring that their product or service offerings stay relevant and competitive in a rapidly changing market.

When business objectives clash

Sometimes, one business objective can clash with another. For example, growth and profit may clash. When a company achieves greater sales in the short term, perhaps by slashing prices, it reduces short-term profit.

Long-term objectives can affect the short-term prospects of a business. If it invests heavily in plant, equipment, or new products, its cash flow in the short-term will suffer.

Many businesspeople complain that the stock market forces short-term business behaviors. Stock market investors focus too much on short-term profits, they say. Companies subsequently suffer, especially regarding their long-term growth.

Other compound nouns with “objective”

“Business objective” is a compound noun (a term consisting of two or more words). There are many compound nouns containing “objective” in the world of business. Let’s have a look at some of them, their meanings, and how we can use them in a sentence:

  • Performance Objective

A specific target or goal related to the productivity and outcomes of an individual’s or group’s work.
Example: “The manager set a strict performance objective for the sales team to increase their numbers by 20%.”

  • Learning Objective

An educational goal that outlines the specific knowledge or skills that students are expected to acquire through instruction.
Example: “The course syllabus clearly states the learning objective for each module.”

  • Career Objective

A personal statement defining the career goals and aspirations of an individual.
Example: “Her resume begins with a clear career objective that aligns with the company’s vision for growth.”

  • Financial Objective

A monetary target a company or individual aims to achieve, typically within a specific time frame.
Example: “The financial objective for this quarter is to reduce operational costs by 15%.”

  • Strategic Objective

A long-term goal that is set to achieve the most important targets of an organization’s strategy.
Example: “The board discussed the strategic objective to enter new markets over the next five years.”

  • Marketing Objective

A goal set by a marketing department to increase brand awareness or sales over a certain period of time.
Example: “The primary marketing objective for the campaign was to engage with a younger demographic.”

  • Project Objective

A concrete statement that describes what the project is trying to achieve.
Example: “The project objective was outlined at the start, stating that the software must be user-friendly and fully functional by the release date.”

Three Videos

These three YouTube videos come from our sister channel, Marketing Business Network. They explain what the terms “Business Objective”, “Objective”, and “Goal” mean using easy-to-understand language and examples:

What is a Business Objective?

What is an Objective?

What is a Goal?