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What Are Business Plan Objectives?

By: Garry Pierrepont - Updated: 7 Jul 2016 | comments*Discuss
 
Objectives Business Plan Strategies

Objectives are really the heart of a business plan. They give a clear indication of the where the business is heading and what it is striving to achieve. Your business plan should contain strategies than can be turned into objectives.

A business plan is best served by making these goals clear. The objectives should be SMART:

  • Specific
  • Measurable
  • Achievable
  • Realistic
  • Timed

This will make them easily measurable (implicit) and therefore more manageable.

Example objectives could be:

  • Increase sales volumes by 25% in the next year
  • Increase profits by 33% in the next year
  • Reduce expenses by 15% in the next year
  • Pay off the loan to ABC Bank in the next nine months

Assuming these are achievable and realistic, they all certainly fall under the headings of specific, measurable and timed.

Wider Objectives

These objectives are all finance related, but objectives do not have to be. Here are some non-finance related objectives:

  • Improve SEO on the website, and as a result increase hits by 40% per month, within six months
  • Improve customer satisfaction from feedback forms from 3.5 to 4
  • Introduce new product to our portfolio in the next year

Again, these are all specifically measurable against a time scale.

Objectives such as “be the best” are useless unless you have some way of measuring that. Such an objective should not find its way into the plan.

However, your objectives can come from aims which are at a higher level. These could be:

  • Get more sales
  • We must increase profits
  • We have to cut costs
  • We need to cut back on interest payments
  • We need make the website better
  • Our aim is to have happy customers
  • More products will improve our profits
  • Be the best!

As you can see, each one of these is a fine aim, but until it is turned into something measurable, you have no way of knowing whether you are achieving your strategies.

What To Do With Objectives

Business plan objectives are all very well, but even when you have turned them into SMART objectives, what do you do with them?

Once the business plan has been written, it is no good pushing into a file and ignoring it. It is only useful if it continues to live, be maintained and develop.

The objectives – which we have made measurable – must be measured against the time scales specified. Using the results, the business can be managed. The results may suggest that a particular area of the business is not being managed properly, or that it is not profitable for other reasons. Changes in market conditions, technology, availability of resources or other external factors may have made it harder to succeed in certain areas of the business. Equally, similar factors may open other doors for the business. It is, therefore, sensible to learn the lesson change the plan.

Changing the plan may mean the removal of some old objectives, and the introduction of new objectives. This is not “cheating” in any way; it is adopting a realistic perspective that in business: things change; some things work, some do not; some people are better at making things happen than others. You need to adjust the objectives in your business plan so that they give your business the best chance of being successful.

Business plan objectives help you measure, control and manage the business. Without them you have no way of knowing if your business is heading on the road to success or not.

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Share Your Story, Join the Discussion or Seek Advice..
Thank you so much it helps me to understand how to write a business plan.
Tsakani - 7-Jul-16 @ 1:34 PM
How to create business plan step by step as from you planning
asah - 11-Oct-15 @ 8:23 AM
very beneficial...fabulous bt mayb had samples
patty - 15-Oct-14 @ 4:13 PM
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