Aims and objectives that are not measured in money

1. Some of what an owner wants from a business cannot be read off a bank statement, and Edexcel names five such aims: social objectives, personal satisfaction, challenge, independence and control.
2. These carry most weight in sole traders and small start-ups, because the owner sets the direction alone and answers to nobody else.

The five non-financial aims and why an owner holds one

1. Each aim describes something the owner wants from the business that a higher income on its own would not deliver.
   1. Social objectives: using the business to leave a community or the environment better off, held by an owner who wants fair treatment of suppliers and staff, or less waste, to be part of how the firm trades.
   2. Personal satisfaction: spending the working week on something the owner enjoys or believes in, held because work that pays more but bores them is worth less to them than the work itself.
   3. Challenge: proving to themselves that they can build something that works, often held after years in a career elsewhere where somebody else made the decisions and took the credit.
   4. Independence: being your own boss, held by an owner who wants to choose their own hours, customers and direction rather than be told what to do.
   5. Control: making every decision without needing the approval of an employer or an investor, held because a business shared with a backer means sharing the choices about products, prices and growth.
2. Independence and control overlap but are not the same, since independence is about who you work for and control is about who has the final say on a decision.

How a non-financial aim changes real decisions

1. A social objective shows up in ordinary buying decisions, and each of the three below costs the business money.
   1. Paying more than the cheapest price: a coffee shop may pay a supplier £4.20 a kilogram because it knows the growers are paid fairly, when a wholesaler offers the same weight at £3.10.
   2. Refusing a cheaper material: a clothing brand may turn down a synthetic fabric costing half as much because it will not break down once the garment is thrown away.
   3. Keeping production in the UK: a furniture maker may keep its workshop in Leeds and pay the National Living Wage rather than move assembly to a country where labour is cheaper.
2. Every one of those choices raises the cost per unit, so the owner must accept a thinner profit or charge a higher price, and a higher price loses the customers who buy on price alone.
3. An owner who values control makes a different sacrifice, by turning down money that would have paid for growth.
4. Levi Roots accepted a £50,000 investment on Dragons' Den in 2007 and got Reggae Reggae Sauce onto Sainsbury's shelves, whereas an owner who refused that deal would keep every decision but stay at the scale their own profits allow.
5. Refusing outside money protects the owner's say over the business, so growth is funded only from retained profit, which means a rival with a backer can open in the next town first and take those customers.

Financial and non-financial aims run side by side

1. Most owners hold both kinds of aim at once, so a baker can want the craft to stay enjoyable and still need the till to cover £1,200 of rent each month.
2. Survival sits underneath every non-financial aim, because a business that has closed helps no community and gives its former owner no independence at all.
3. Non-financial aims are also harder to track, since there is no figure like revenue to check, so the owner measures them by whether the work still feels worth doing and whether the promised benefit is visible.