All businesses use SMART objectives
In a business, you need to be both able and willing to work towards reaching goals. Therefore, it would make it a realistic goal. If businesses started making unrealistic goals, then they would probably give up really soon. Goals don’t need to be unrealistic; they can be both high and realistic; the person running the business is the only one that can decide whether how high the goal should be. If a business truly thinks that the goal they are setting is achievable, then it can be deemed as realistic.
Another way in which business can check if their goals are realistic is to think back and determine whether they have accomplished something similar in the past. Timed All goals should have a set time in which businesses choose to achieve them. This would push the businesses in the right direction, and make them keep going. Linking back to ‘Realistic’; businesses need to make sure that the timeline they set are realistic. Objectives An objective is something that is set by a business to help them reach that aim.
All businesses put in place objectives, but they may differ from one another, as all businesses are different. Business objectives may change over time either if they have been completed, or if the business managers looked at the objectives and understood that it was not reachable. If a business objective has been reached, then it will be changed so that the business can push forward and accomplish other objectives. I have placed a few main objectives for my business, and these are as follows:
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I have chosen this objective for my business as I do not want to fall just as it starts up, I will be very wary of my accounts, and I will manage my money well. – To increase the business’ profit within the first year – All businesses want to increase their profits, as without money, they cannot do anything with the business. Many businesses tend to expand their business, so they can get money from around the country.
The reason why I have chosen this to be one of my main objectives is because I want to make my store bigger, not only to buy more products, but to expand it and have ‘Actors Vision’ set up in fantastic places like Liverpool, Leeds, Cardiff, Birmingham, Glasgow, and of course London. This would be a long distance objective though, for now, it’s just to increase my profit to buy more products for the business. – To offer good quality products to my customers – This is a major concern to all businesses, to know that what they are selling is of good quality.
A customer can immediately recognise if the products they are buying is of good quality. The reason why I have chosen this as one of my main objectives is because I don’t want to sell shabby products, as I know I will be getting bad feedback and not get a good reputation, I want to be selling products that people will want to tell their family and friends and they would come to my store and purchase such items. – To expand my business’s reputation – Having a business more recognised would help them a lot, as everyone would know who they are and what they sell, and would go to their stores and purchase items.
Take ASDA as an example, everyone knows who they are, and as a result, they are the leading supermarket in the country. The reason why I have chosen this as one of my objectives is because without reputation, my business would go nowhere. Aims The aims of a business are targets each business would lay down at the start of each year, which they want to achieve. Therefore, this would be completing their mission statement. If a business does not reach some of their objectives, then they will have no hope of reaching their main aim, the mission statement.
I have set down a few aims that I want to reach in my business, these are: – Offer the highest quality service to all customers – the reason why I have chosen this as one of my main aims is because without good products, customers will not want to be shopping at your business. In my case, the products I will be selling are the best props theatres could buy, best lighting equipment and a variety of scripts. If I began to sell my customers cheap and second hand goods, then they would be less likely to come to my store again and purchase more items, so the better the product, the more customers I will have at my store.
– To support more local and global charities – for a business to donate money to charities is very thoughtful. The more businesses get involved with charities, the more popular they will be getting with the public. It is obvious that a business won’t start giving money straight away to charity, as they need as much money as possible to start up. Some businesses just give money to charity for popularity, and my business would not be donating money to charity just for the popularity, but for the sheer enjoyment of knowing people are getting money and that my business would be helping people.
– For the business to survive for more than a year – All businesses need to ensure that they manage their money well, keep track of their profit/loss accounts, and their cash flow forecasts, and see where the flaws are appearing in their business, and what needs to be improved. My employees need to be committed to my business, as they would be working long hours, with not the highest payment. Also, I need to advertise my business a lot, so if there are acting magazine handed out, I will need to speak to the editors and buy a section of the magazine to advertise my business.
These aims are very important to me, as if I don’t reach those aims, then my business will not go anywhere. If these aims are not reached, then I know that my business will not survive longer than I wanted it to. For these goals to be reached everyone working in the business will have to work their hardest and if they are passionate about the business, then reaching their targets will be simple. All businesses use SMART objectives to help them with their aims, and that’s what I have done. These aims and objectives have not been set in stone, but they may change in the future, depending on how it turns out.
Mission Statement A mission statement is a formal short written statement of the purpose of a company or organization. The mission statement should guide the actions of the organization, spell out its overall goal, provide a sense of direction, and guide decision-making. A mission statement is a necessity, as without them, all of the aims and objectives would have been a waste of time. I have chosen a simple mission statement for my business, and that is: “To offer the best service possible to all customers”
I feel that this is a good mission statement, as it simply says that I want to give the best to my customers, I don’t want to give them second best products, but top of the range items. There is always competition with all businesses, and as I know there is competition around the country, It will keep my business going and keep me motivated and I will buy everything for my customers. Legal structure for the business Now, I have to decide what my business is going to be set up as, for example a partnership, sole trader, shareholders.
For my business, I am going to set it up as a sole trader. The very simple reason why I have chosen my business, Actors Vision, to be a sole trader is because it is only a small business, and just covers the local area, which is Flintshire. It would be a lot better if I set my business up as a sole trader, rather than a big company, as its pretty small. A legal structure which affects a sole trader quite be pretty difficult, but it is a lot easier for someone who is setting up a business as a sole trader to start up than someone who’s set up as a PLC or LTD.
The reason for this is because a sole trader does not have to pay for any registration fees, although someone who is setting up a PLC or LTD does. This is an advantage because someone that’s a sole trader can keep all of the profits that their business makes. One of the constraints of setting up a business as a sole trader is that you are liable to any debts that the business runs into. The term used for this is called an unlimited liability. (If the business goes bankrupt, the owner loses his/her personal possessions) I will now start talking about the advantages of setting up a sole trader, and disadvantages of setting up as a sole trader.
Some of the advantages of setting up a business a sole trader are that you are your own boss. If you want to make a decision that will change your company, there is no one that can tell you that you can’t. As I am the boss of ‘Actors Vision’, I know that if a decision needs to be made, I will make it and hopefully it will turn out for the best. There are a few ways how a business can get money when setting up a business, they can either take money out of their own pocket, which would have been their savings, or they would have taken out a loan from the bank, which they would have to give back in the future.
Initially, I would try and use some of the money I was saving up to start the business, but if I know that I am in need of some money, I will think about taking a loan out of the bank, but I know that they may hesitate giving me the money, as many sole traders businesses break down. Some of the things that a business has to do as a sole trader is make annual self assessed tax returns by yourself, as it’s the role of a manager should complete it as it requires details of the businesses profits and outflows for the past year.
Being a sole trader, it is really easy to set your business up, as you only need to declare to yourself that you are going to be a business, but you have to inform the Inland Revenue that you are self employed within 3 months of starting the business. As there are no staff on hand the owner would take 100% of the profits they made by the business and all the business’ financial information is kept private, whereas limited companies need to file accounts each year at companies houses. When the business is paying wages to their employees, the wage will be really low, that is if they have employees.
In my business, I will have between 3-5 employees, as if I have too many it will get overcrowded and I will be paying out too much money. The reason that I have a few employees is to take some of the weight off my shoulders, and if I need a break, someone else can take over and I can trust them to do the job correctly. Some sole trading people will get a sense of achievement by working for themselves by selling a certain amount of goods, reaching their sales target, receiving a large profit. Sometimes, this may backfire on some people because they don’t always achieve what they want to achieve.
They might even lose profit, not sell enough items and if this disturbance carried on for even longer, the business would have to close down. When making decisions as a sole trader, they are made really fast, as it is just the owner that needs to make the decision, and they don’t need to consult with anyone else. If they are making a decision to improve their customer service, it would be a lot easier to do, as it’s a small business and they would be closer to the customers, whereas if they were someone like ASDA, then it would be harder to improve customer service.
When you set up as a sole trading business, the accountants would generally charge less for business accounts and advice as there is less work to undertake. Accountants need to complete profit and loss accounts, rather than a balance sheet or a cash flow forecast. Another advantage of being a sole trader is that the business can cater for the local people, as it is only a small business and if they ask to bring in specific products, then it could be dealt with.
In my business, I will be catering to the actors and theatres in North Wales/Cheshire/Liverpool, and I know that there are many theatres and businesses that need the equipment that I need. My business may also cater for many schools, as I know that some schools, including mine, carry out major productions each year, and they want to purchase the best props and lights etc. I will now start talking about the disadvantages of setting up a sole trading business. One of the main disadvantages of being a sole trader is, as the owner of the business, you are solely liable for any consequences of business failure or any other liability.
This would be very stressful for the business owner, as they know that the business rests on their head, and if they begin to make mistakes, especially near the beginning, the business will soon close down. if I began making the wrong decisions for ‘Actors Vision’; I know that they would begin to sink and it will be really hard to get back to the top. Even though I am a sole trader, I could still consult with a few of my employees, asking them what they think of this idea, and if they think it’s a bad idea, I will still think of going ahead, but make sure that I am doing everything correctly.
Another disadvantage of being a sole trader is that if the owner is sick, and they don’t have any employees, who are going to run the store. If this occurred, then the owner would have to call a close friend or family member that has some experience in business. This could be a flaw in setting up a business as a sole trader, as they need to have either employees that they will need to pay, or have a close family member or friend that would be willing to take over the business for that specific amount of time.
This would not be the case in my business, as I have a few employees that would take over, but if I am not going to be at the store, then I would have someone to open the store up and being an acting owner for the day, and it would be someone that I trust and someone that I know could carry out the role correctly. Being a sole trader, your personal possessions are at stake. You may not have a security guard because you’re a sole trading business and then that means that your tools and equipment are at a risk.
To try and prevent this as much as possible, the sole trader would need to use some of his/her money and buy security items such as cameras, alarms, sensors, etc… For my business, I would have a few security cameras and alarms in the store, but it would be covered in the front, as it would have a large metal sheet which covers most of the businesses stores at night. Many sole traders would agree that the hours would be so long, as if they don’t have any employees, they would be the only one running the business.
The disadvantage of this is the sole trader might find it very boring, and if there are no customers at a certain time, then the day may drag on. On the other hand, if they are working for themselves, and they know that they are getting more profit the longer they are open, then it will motivate them to work longer, so that would keep them going. Before I set up my business, I already knew that the hours would be very long, and that some parts of the day, I would not have a single customer in, but the more ‘Actors Vision’ gets advertised and recognised, I know that more and more customers will be attending my store.
When a sole trader is trying to get some money out of the bank, it may be a bit of a struggle, as many banks and other lending institutions might be very reluctant to start lending money out to sole trader, as they have a higher rate of bankruptcy. As I said before, the bank may be hesitant if I ask for a loan, but I would firstly take the money out of my own pocket, and then if I need some more money, I would ask for a reasonable loan, knowing that it would be an amount I could pay back.
Another disadvantage of being a sole trader for the customers is that the prices at the store are usually a lot higher than those of larger organisations. This is because sole traders tend to be small and are unable to buy materials in large bulks and benefit from the lower prices this offers. If you’re a sole trader, then you can usually join voluntary groups, for example, Spar, or Londis in order to be able to buy in bulk. In ‘Actors Vision’; the prices would be higher than other stores, and that is the simple reason that I can’t buy in bulk as I am a small business.
Once I start to get recognised and people start coming to my store, then I may start to buy in bulk as I know that they will be sold. The biggest disadvantage of being a sole trading business is that he or she is fully responsible for all of the debts of the business. This would be called unlimited liability, which as I explained before, means the owner might lose all of their personal possessions if they cannot pay the debts of the business, for example, if it went bankrupt. I will briefly talk about setting up my business in a partnership, and then evaluate the pros and cons of each one.