An entrepreneur’s objectives are the aims the business is trying to reach. They are not fixed. A start-up that is losing money usually aims to survive, while a steadier business can aim for profit or growth.
This skill belongs to enterprise and business purpose and leads directly into objectives and stakeholders.
How do you read objectives from a business’s figures?
Use a short routine.
- Find profit for each period: revenue minus costs.
- Find profit margin if the question gives revenue: profit ÷ revenue × 100. The ratios with interpretation limits tool shows the same calculation.
- Describe the trend: is profit negative, rising, or rising more slowly than revenue?
- Match to an objective: survival, profit, growth or another aim, and give a reason.
- Say what else you would want to know, since figures show behaviour, not intention.
Worked example
Mei Ling runs Kuih Mei, a home bakery in Petaling Jaya.
| Year | Monthly sales | Monthly costs |
|---|---|---|
| 1 | RM4,000 | RM4,300 |
| 3 | RM11,000 | RM8,800 |
| 5 | RM28,000 | RM23,800 |
Step 1, profit. Year 1: 4,000 − 4,300 = −RM300, a loss. Year 3: 11,000 − 8,800 = RM2,200. Year 5: 28,000 − 23,800 = RM4,200.
Step 2, margin. Year 3: 2,200 ÷ 11,000 = 20%. Year 5: 4,200 ÷ 28,000 = 15%.
Step 3, read the story.
- Year 1: a small loss. The likely objective is survival, getting sales high enough to cover costs.
- Year 3: profit appears at a 20% margin. The objective is likely to be profit, with the owner now earning from the business.
- Year 5: profit nearly doubled to RM4,200, but margin fell to 15% while sales grew about 2.5 times, from RM11,000 to RM28,000. That suggests an objective of growth, possibly a larger market share, even at a lower margin.
Step 4, qualify. The figures fit these objectives. To be sure, you would want to know whether Mei Ling opened a second kitchen or cut prices.
The mistake to watch for
Mistaken answer: “Her objective in Year 5 is still profit maximisation because profit went up.”
This sees only that profit rose and ignores that margin fell.
The correction is to compare both profit and margin.
A business that wanted to maximise profit margin would not accept 15% after reaching 20%.
Rising sales with a falling margin points more strongly to growth. Also avoid the idea that every owner always wants the highest possible profit. Some prefer stability, a good reputation or serving a community.
Check yourself
1. A stall owner makes a loss of RM300 a month but keeps trading. Suggest a likely objective.
Show answer
The likely objective is survival. The owner is trying to stay open and reach a point where sales cover costs. Profit is not yet a realistic aim.
2. Between Year 3 and Year 5, profit rose from RM2,200 to RM4,200 while margin fell from 20% to 15%. What does this suggest about the owner’s objective?
Show answer
It suggests growth. Profit increased in ringgit, but the owner accepted a lower margin while sales expanded. The figures alone cannot prove it, so the answer should say what else to check, such as new premises or price cuts.
3. Give two reasons why an entrepreneur’s objectives may change over time.
Show answer
Any two of these. The business has moved to a new stage, such as from start-up to stable trading. Competition has changed. The owner’s personal situation has changed, for example more time or more savings available. The market has grown or shrunk.
Where this leads next
Once you can connect numbers to aims, move to identify a business idea assumption that needs evidence, which asks what must be true for the aim to be reached.
Reading objectives from figures is a skill that improves with feedback on your written answers. A teacher in online one-to-one Business tuition can mark a case answer line by line and show where evidence is thin.