Clear, concrete business objectives are vital to a company’s strategic planning process and support the accomplishment of larger, overarching corporate goals. Becoming familiar with sample business objectives can enhance your current work experience or help you prepare for a future career in business. This article defines what business objectives are and provides several examples, organized into common objective types.
What are business objectives?
Business objectives are concrete targets that a company will monitor to evaluate its performance towards a broader goal. As compared to a more subjective or values-oriented goal, business objectives have an exact numeric value attached to them. For example, if a company’s goal is to increase its presence in the international sneaker market, their objective might be to sell one million dollars worth of sneakers in Europe and Asia over a two-year period.
Example guidelines for business objectives:
Examples of additional guidelines for maximizing the effectiveness of business objectives:
- Identify who is responsible for accomplishing the objectives
- Determine when progress will be monitored
- Determine by what system the company will evaluate success
- Use the objectives to develop the company’s strategic plan
- Limit the number of objectives to an average of three to five, with smaller performance indicators or sub-goals for each
Keeping the number of objectives small allows companies to maintain a clear focus and allocate time and personnel resources accordingly. Whether in your current organization or one you are applying to, consider asking what the organization’s objectives are. This can provide context for your specific role and help you understand how your job duties support one or more of the company’s core priorities.
Examples of common business objectives
Here are some common business objectives, with example objectives for each category:
Revenue refers to a company’s total income generated, before subtracting operational or production costs. Revenue objectives may be written in terms of the number of units sold or the total value of units sold. An example of this distinction would be 400 cars sold vs. car sales totaling 16 million dollars.
Examples of revenue objectives:
- Reach 20 million dollars of sales from the product line in the first two years of production
- Increase revenue by two million dollars per quarter for four consecutive quarters through an expansion of the e-commerce system
- Increase ticket sales to 85% of stadium capacity for all home games for the 2020 football season
Many companies aim to reduce their operating, production and sales costs in an effort to increase their net revenue. Cost objectives may relate to personnel, manufacturing and/or distribution, marketing and advertising or something else.
Examples of cost objectives:
- Reduce high-speed motorcycle production costs by 30% over two years through the implementation of an automated production system
- Reduce personnel expenses by 20% in the year 2021 by offering healthcare and dental benefits to full-time employees only
- Reduce office supply costs by 15% each quarter by shifting to exclusively electronic communications for company messaging distributed to all staff
Operational efficiency has potential benefits for employee and customer satisfaction, product expansion, production costs, total sales and various other indicators. As a result, companies often set operational targets to track their progress towards those broader goals.
Examples of operations objectives:
- Deliver 100% of customer orders on time without manufacturing defects
- Complete 90% of major projects on time and on budget by implementing project management software with fidelity
- Complete new employee onboarding procedures in 14 days or less, as tracked in the electronic human resources portal
Many businesses set compliance targets to avoid associated penalties and because compliance targets are often also connected with success on related outcome metrics. For example, retail companies that meet all compliance requirements for equitable access for individuals with disabilities are likely to have higher customer satisfaction scores and possibly higher sales as well.
Examples of compliance-related objectives:
- Submit 100% of financial reports on or before the deadline, consistent with local and/or national guidelines
- 100% compliance with Americans with Disabilities Act regulations for parking spaces, entrances, dressing rooms and checkout spaces by the end of 2020
- 100% of eligible new hire candidates complete fingerprinting and background check requirements before receiving a written offer letter
To increase sales and revenue, to expand their business and to maintain a steady client base, companies invest significant time, energy and money in customer satisfaction. Although it varies across companies, this is often assessed through customer surveys, social media monitoring, sales history and other methods.
Examples of customer satisfaction objectives:
- Maintain an average of three stars or higher on all website product reviews and independent company rating sites
- Ensure that 80% or more of customer surveys indicate customers are likely or very likely to recommend the organization to a friend
- Increase customer retention rate to 80% by the end of 2021 through execution of targeted marketing and advertising systems
Sometimes described in technical terms of market expansion, diversification or market penetration, a company may set growth objectives that refer to the growth of their sales, customer base or brand recognition within a particular industry. Market expansion and diversification refer to the breadth of services offered and market penetration refers to the percentage of a company’s target client base that purchases its products.
Examples of business growth objectives:
- Expand distribution of weekend newspapers to reach 80% market penetration by the end of 2021
- Use a social media marketing campaign to increase target market product recognition to 75% by Fall 2020
- Add 10 new sports bars to the existing franchise within two years