Financial & Non-financial Objectives (Edexcel IGCSE Business)
Exam board Pearson Edexcel · IGCSEUpdated 2025-06-16
Financial objectives
Spec point —
1.1.1· Survival, profit, sales, market share, financial security
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Business objectives are targets that guide operations and drive growth in an organisation
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Setting and sharing clear objectives can help a business to succeed for several reasons
- Business owners have a focus for their decision making
- Employees have common goals to work towards and can be motivated to achieve targets
- Performance can be weighed up against objectives and suitable adjustments made for future success
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Objectives are most useful when they are SMART
- Specific: it states precisely what is to be achieved
- Measurable: the desired outcome is expressed in quantitative terms
- Achievable: it is possible with the people and resources involved
- Realistic: it is possible with the resources the business has at its disposal
- Time specific: it is clear when, precisely, the objective is to be achieved
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An example of a SMART objective might be for a business to increase its sales revenue by 10% by the end of the year
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Financial objectives are specifics goal related to the financial performance, resources or structure of a business
- They are particularly important in the private sector as owners are likely to want to make money
Main types of financial objectives
| Objective | Explanation | Examples |
|---|---|---|
| Survival | - Survival involves keeping a business operating for a certain amount of time, such as its first year of operation - Survival is also a key focus during periods of challenging business conditions or when **strong competition emerges | - Camping Sous les Étoiles in France focused on survival during the 2020 global pandemic as travel restrictions limited holidays |
| Profit | - Profit is **the difference between the total sales revenue and the total costs of the business - Profit can be reinvested into a business or shared with business owners as a reward for risking their investment - Profit maximisation involves making as much profit as possible | - Belgium's** Brewery de Blaugies** aims to maximise profits to fund the building of new production and distribution facilities that are needed for its planned expansion |
| Sales | - Selling increasing volumes of products can help a business to increase its market share - High sales can also increase awareness of a business and its brands - Large-scale businesses often benefit from lower average unit costs | - France's Le Creuset has increased sales of its luxury cookware across Europe by opening sales outlets and improving its online store |
| Market share | - Market share is the proportion of a market controlled by a particular company, brand or product - Businesses with high market share can dominate the market and become well-known - Market leaders may be able to charge higher prices than rivals and make more profit | - Since 2018, Ediya Coffee has increased the number of outlets it operates in South Korea and introduced a delivery service to gain market share from leading rival Paris Baguette |
| Financial security | - Business owners may simply want to earn a living from the risk and effort they put in - Satisficing may be enough for a business owner to pursue a desired lifestyle | - Reema Koch runs her small eco guesthouse in Malta during summer months and spends winter working with animal charities in Turkey |
Non-financial objectives
Spec point —
1.1.1· Social objectives, personal satisfaction, challenge, independence and control
- Non-financial objectives are targets that are not directly connected to making money
- Achieving non-financial objectives is often the main focus of businesses in the public sector and the voluntary sector
- Many profit-making businesses also set non-financial objectives that compliment their key financial objectives
Main types of non-financial objectives
| Objective | Explanation | Examples |
|---|---|---|
| Social | - Providing a reliable, high-quality service to a particular community is the focus of many public sector organisations - Charities and cooperatives are often focused on improving human well-being or the environment - Businesses increasingly aim to meet the needs of a range of stakeholders by providing employment opportunities, being eco-friendly or contributing to the local community | - After visiting Argentina in 2006 Blake Mycoskie set up TOMS Shoes, pledging to donate one pair of shoes for every one sold |
| Personal satisfaction | - Achieving success by doing something enjoyable can be satisfying for business owners - Spotting an opportunity and pursuing it as a business can be a matter of great pride | - Former schoolteacher and keen environmentalist Laura Hirsch established Grüne Kleinvolk in 2022 as a pre-schoolers' forest activity centre in Germany's Schwarzwald |
| Challenge | - Using and developing skills can present interesting challenges - Some business owners love solving problems or enjoy seeing the results of hard work | - Since starting her interior design business in Malta in 2013 Kristine Bonnici has achieved qualifications in accountancy, marketing and business leadership |
| Independence and control | - Independence to make their own decisions can be a key motivator for entrepreneurs - A business owner may want to control their own time and business direction without interference from others | - After being made redundant in 2020 sound engineer Vinay Patel set up a talent agency in Mumbai, focused on sourcing new talent for the city's successful film industry |
Exam Hint You may be asked to give an example of a business objective
Look at the question carefully - has it asked you to give a financial objective or a non-financial objective?
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