Almost 70% of small businesses fail within the first 5 years of establishment. Reasons for this include lack of management or technological expertise, account keeping skills, cash flow or forced out through competition. Without essential planning and the correct procedures put in place to execute these plans it can be said that businesses do not plan to fail, yet fail to plan.
Planning maximizes the potential for success and extends the aptitude to which a business can create wealth, prosperity and security for owners and employees benefit society with its products and services and enable easier practice of day to day functions.
In business, goals are set to outline what the business hopes to achieve through its existence and operations. A successful business should be aware of their goals and strive to attain these to the best of their ability.
There are 3 types of business goals being financial, social and personal goals.
Of the three, financial goals would be of most importance because they determine whether a business results in financial success or terminates in a loss.
To survive in the long term, a business is required to 'break even' to cover its expenses and ensure it does not loose money. After a business breaks even, the remainder of the money, known as profit is distributed to the owners to gain return on their investment in the company. Profit gained from the amount a business sells a particular product is related to the product sales and market shares. The more product a business sells, the larger the share of that products market the business owns. To further increase the successfulness of the business, owners may endeavor to utilize the profit gained to grow and diversify their business, by employing more people, opening at additional locations etc.
Social goals include...