1. OKR examples
2. What is Business? A business is an organisation that seeks to generate a profit.
2.1. Product and service
2.1.1. What is a service? A service is when a business performs an action for the customer to improve their life in some way. The customer gets to use the service for a limited time.
2.1.2. Vocabulary: Profit - is the difference which arises when revenue exceeds costs. *Profit = revenue - cost
2.1.3. What is a product? A product is a good that is produced by a business and sold to a customer; ownership is transferred. Product can be: Physical or digital
2.2. Why do business exist?
2.2.1. What are your needs and wants? -Needs: Food, Water, shelter, electricity, education. -Wants: Car, phone, a car for the future.
2.2.2. Business activity: Business activity aims to meets these needs and wants usually for a profit.
2.2.3. Goods or services: Goods or services that are produced for ordinary people/consumers are known as consumer goods while those made for other businesses are called producers goods.
3. Factors of production
3.1. Goods and services are made out of resources or factors of production. Business functions include production, marketing, managing, human resources and financial control.
3.1.1. Land
3.1.2. Labour
3.1.3. capital
3.1.4. enterprise (The person who starts the business)
4. Vocabulary
4.1. Social enterprises: Main objective is the social issue.
4.2. Added value: Add value by converting inputs into outputs through a series of processes. Adding value is the process of creating a good/service is worth more than it cost to produce.
4.3. Profit maximisation: Making as much profit as possible in a given time period.
4.4. Financial return: monetary return.
4.5. Dividends: Share of the profit paid to shareholders in a company.
4.6. Shareholders: Owners of limited companies.
4.7. Profit satisfying: Making enough profit to satisfy the needs of the business owners.
5. Business Objectives (Financial objectives)
5.1. What are business objectives? A business objective (or corporate objective) is a specific target set by managers in order to achieve the wider corporate (or business) Aims -> Objectives -> Strategy
5.2. Definition of financial objectives: A financial objective is a goal that relates to money within the business.
5.3. Financial objectives
5.3.1. Survival (80% business fail) : A business can survive if it's "liquid". Being liquid means the business is able to meet its short-term debt obligations. (e.g. pay its bills). Survival is important to all businesses, but business start-ups are particularly vulnerable to insolvency, so are more likely to prioritise this objective. (But important-business may struggle not necessarily fail).
5.3.2. Profit and profit maximisation: Profit is fundamental to business activity, as it rewards entrepreneurs for taking a risk in starting a business and for the hard work required to maintain it.
6. Business Objectives (non financial objectives)
6.1. Definition of non financial objectives: A non financial objective is a goal that does not directly relate to money within the business.
6.2. Non financial objectives
6.2.1. Social satisfaction: Personal satisfaction is an objective where by the business or work down. Business objectives based on personal satisfaction are likely to involve one of the following:
6.2.1.1. A hobby or interest of the entrepreneur.
6.2.1.2. Rewarding or satisfying work.
6.2.1.3. Satisfied customers.
6.2.2. Challenge: Entrepreneur may sat targets that provide a greater degree of difficulty or challenge for the business, including:
6.2.2.1. Entering new markets.
6.2.2.2. Developing new products.
6.2.2.3. Expansion/growth.
6.2.3. Independence and control: Entrepreneur generally find that they have more independence han employees. This ay include the following:
6.2.3.1. Financial independence.
6.2.3.2. Control over decisions and working life e.g. uniform/clothe.
6.2.4. Smart objectives: Objectives should be smart:
6.2.4.1. Specific - Relates to a particular aspect of the business.
6.2.4.2. Measurable - Success or failure can be clearly measured.
6.2.4.3. Achievable - Realistic given the constrains of the business.
6.2.4.4. Relevant - Closely related to the circumstances of the business.
6.2.4.5. Time bound - Given a specific timeframe in which to be achieved.