Objectives of business

Every business needs profit: the money left after paying all costs (revenue minus cost). Profit matters because it is:

• the income of the owners;
• money to expand the business;
• a sign of efficiency;
• society's approval that the business is useful;
• a builder of reputation.

But profit is not the only aim. If managers chase profit alone, they may neglect or even exploit customers, employees and society. So a business needs objectives in many areas:

• Market standing: its position among competitors.
• Innovation: new ideas, including better ways to make an old product, not only new products.
• Productivity: getting more output from the same inputs. It compares the value of output with the value of inputs.
• Physical and financial resources: getting and using them well.
• Earning profits: enough to survive and grow.
• Social responsibility: caring for the community and environment.

So profit is a leading objective of business, but not the only one. A business that balances all these aims is more likely to last.