If you want to found a company, then you should already define certain company goals in the business plan. Now you’re wondering: What kind of goals could that be? They serve as guidelines to which entrepreneurial activity is based.
Company goals – definition
Corporate goals lay the operational target state Celebration. The target state describes the state up to a specific point in time is to be achieved. Business goals can be Upper and lower goals or in sub-goals to be grouped. Basically, if you run a company, you want it economically successful be. Therefore, for most companies, the ultimate goal is the profit maximization. The profit depends on several factors. It is therefore important to always set partial or sub-goals.
- Increasing market share
- new customer acquisition
Business goals have the purpose:
- to motivate employees
- The company goals provide the employees with an overview and thus the reasons why they should go to work in the morning.
- to offer orientation
- You define what is being worked towards
Clearly defined company goals ensure that everyone in the company knows what they go to work for every day and influence the strategic direction the company.
Strategically in the economic framework means the long-term, roughly defined planning.
Company goals – sub-goals
The goal of profit maximization can be divided into the following sub-goals:
- Success Goals
- In addition to profit maximization, return on equity
- financial goals
- They support solvency and creditworthiness.
- market targets
- Increase in market share
- social goals
- Securing jobs
- prestige goals
- Preserving the image and tradition of the company
- ecological goals
- Play a special role, especially in production.
return on equity is the ratio of profit to equity employed. It is given as a percentage and shows how economically a company works.
«ComTech GmbH» aims to increase earnings by selling more computers. To this end, the company has set itself sub-goals:
In addition to maximizing profit, the return on equity and total capital should also be increased. In addition, the solvency and creditworthiness of the company must be ensured. The company’s value is to be increased through a higher market share, and in order to pursue social goals, the company sets job satisfaction and personnel development as sub-goals.
For example, the sub-goal of a higher market share leads to maximizing profits, since the company or product occupies a higher share of the market and thus more revenue can be generated.
Company goals – the time frame
Business goals are typically broken down into the following categories:
- short-term goals
- medium-term goals
- long-term goals
The long-term goals are those overriding goalson which the medium- and short-term goals are based.
Company goals – which factors play a role?
When setting corporate goals, there are a few factors that the company must consider:
- economic factors
- social factors
- ecological factors
economic factors
In most cases, the aim is to ensure that the company works as profitably as possible. In order for this to be achieved, the choice of location or target group, for example, plays a significant role. Technological factors must also be taken into account. If the company’s machines are outdated or technically outdated, then they have to be replaced with modern machines. Otherwise, the risk of losing customers to the competition is high.
social factors
The social factors relate to the workplace situation the company. These include job security or employee satisfaction and motivation. But dealing with customers or external service providers also plays a role here. These are all factors that, while not particularly easy to measure, help define what the company actually stands for.
Social responsibility also plays a role here. This means that the company acts in a way that benefits society. This is playing an increasingly important role, especially with regard to investors and consumers. When making investments, they not only pay attention to profitability, but also to the fact that they contribute to the well-being of society and the environment.
ecological factors
Ecological factors are becoming more and more important. These mainly include the Environmental and climate protection. But the increasingly scarce resources also make it necessary to deal with them consciously. It is therefore important for companies to pay attention to sustainable production and to use renewable energies.
This may not be particularly important to many companies, but young startups in particular tend to pay a lot of attention to the ecological factors. This not only marks your company as modern and environmentally conscious, it can also be used in a targeted manner new groups of buyers be addressed.
An economic disadvantage may arise here due to higher costs, but there can also be an advantage by opening up new groups of buyers. Thus, economic and ecological factors do not necessarily have to be mutually exclusive, they can also work together.
- Recycling plastic from the ocean
- No pollutants and microplastics
Company goals – classification
The company goals can be divided into two areas: qualitative and quantitative goals. Surely you have heard of quality and quantity. In order to make the difference clear to you, we have two small definitions for you here:
Distinguishing between quality and quantity:
Quality:
The quality describes a state, a condition or properties.
Quantity:
Quantity is about the amount or number of something.
Qualitative corporate goals
As you can probably guess from the definition, qualitative goals cannot be directly measured or expressed in numbers.
- customer satisfaction
- image improvement
- increasing awareness
So that the corporate goals can be formulated as clearly as possible, entrepreneurs must find a way to make the qualitative goals measurable as well.
A scale is introduced to measure customer satisfaction. Assuming happiness is estimated at a 7, then an entrepreneur will aim for an 8 or a 9, and of course a 10 in the long run.
Quantitative corporate goals
In contrast to the qualitative goals, the quantitative goals can be quantified. So they can be expressed in concrete numbers to be achieved.
- Increase in sales by 20%
- Adherence to the given budget
- increase in production figures
Corporate goals – differentiation from corporate values
the goals and values of a company are closely related. In particular, there is some overlap between a company’s social and environmental goals and values. So how are you supposed to differentiate them?
The best way to differentiate the whole thing is to keep in mind that the values are not what is intended to be achieved. The values describe much more what is lived in daily dealings. You can think of them as rules for living and working together. They determine the culture that is cultivated in a company.
The goals can therefore be expressed in words and numbers, the values are lived out, they determine the attitude of the entire company.
Company goals – the most important things at a glance
- The ultimate goal is mostly profit maximization
- The profit depends on several factors, so there are also partial or sub-goals
- Purpose: Motivate employees and provide orientation
- The goals influence the strategic orientation of the company
- There are short, medium and long-term business goals
- Economic, social and ecological factors influence corporate goals
- There are qualitative (not measurable in numbers) and quantitative (measurable in numbers) goals