What is business?

Question 1

What is a mission

Answer 1

A broad description of why a business exists

It summarises the long-term aims of the business

Missions or aims are NOT usually expressed in specific numerical terms

Question 2

What are objectives

Answer 2

Measurable targets to be achieved within a specific time-scale

Question 3

Examples of objectives in a business

Answer 3

• Achieving specific levels of profit
• Specific rates of growth
• Survival
• Specific levels of cash flow
• Social & ethical targets

Question 4

What does the objective “specific level of growth” mean and why is it important

Answer 4

It means the percentage increase in the size of a business, revenue or profits

Growth creates a higher market share, higher profits and help achieve aims for employees and other stakeholders

Question 5

What does the objective “specific rates of profit” mean and why is it important

Answer 5

It means Revenue - Total Costs

It is important as profit provides money for growth and to the owners whilst attracting new shareholders and keeping existing ones happy

Question 6

What does the objective “survival” mean and why is it important

Answer 6

It means the continued existence of a business, especially if its new or in difficult circumstances

Its important as the business can only continue to make money if it continues to exist.