The core fundamentals of any business are to generate income and be profitable. While these financial objectives should always remain intact, you must also think about other aspects that contribute to your company’s success. Implementing robust growth management strategies is an area to pay particular attention to. They ensure you’re on the right track to experience substantial and fruitful transformations over time.
Financial and non-financial objectives have a significant impact on many business areas. Today, we’ll see how such objectives affect your business’s overall growth and development. We’ll also share tips on how to harness the power of each to elevate your business to incredible heights.
Why non-financial business objectives are important
It’s easy to exclusively focus on the bottom line when you’re running a business. After all, you’re generally in business to make money, aside from any personal passions or professional desires that may motivate you. But this is where many companies go wrong when setting out their short-term and long-term objectives. When measuring the success and value of a business with financial objectives alone, it’s easy to miss other crucial advantages that can be achieved by moving away from the numbers and paying attention to people.
Non-financial business objectives may include
- Enhancing employee engagement (decreasing staff turnover and increasing employee retention and satisfaction)
- Employee training and investment
- Improving ethics and diversity
- Improving customer service (keeping customers and clients on board for longer, increasing loyalty, and lowering acquisition overheads)
- Investing in company culture and creating an identity and core values/philosophy that run through everything you do
- Implementing an environmental policy
- Community and charity involvement (giving back to your local community or chosen charities, in turn raising your profile and encouraging customer engagement)
Many non-financial business objectives focus on people. People are the fundamental backbone of most companies (as both consumers and employees). Customer and employee engagement should be a key non-financial objective if you want to secure sustainable, more long-term success.
Non-financial business objectives vs financial objectives of a business
The benefits that come with achieving financial business objectives are relatively well-known and straightforward (more on this below). Hitting sales targets and revenue markers is associated with enhanced profitability, augmented income, and higher profits.
But what are the benefits of non-financial business objectives?
Dismissing these goals could cost you considerably as the advantages they bring are not confined to your business value and growth. Instead, they offer a diverse range of positive outcomes, including:
- Improved quality of products and services
- Improved customer satisfaction (leading to increased sales)
- Smoother implementation of business strategy
- Improved employee engagement and satisfaction, leading to enhanced productivity, low employee turnover/higher employee retention
- Streamlined processes and better use of resources
- Better relationships with external suppliers and contractors
As you can imagine, non-financial business objectives and financial targets are intrinsically linked. Non-financial business objectives can impact your company’s profitability, but what about the purely economic aspects of future planning?
How key financial objectives of a business can be implemented for a more significant impact
Key financial objectives of any business tend to include:
- Business revenue growth: The fundamental of any business is to continue making more money year on year, increasing profits, or sustaining them. Most businesses set a percentage target to measure this progress, such as 10%, 15%, or 20% growth, taking into account net and gross figures
- Profit margin enhancement and augmentation: Directly tied to greater profits, investment in systems, and streamlining to help your business work smarter, not more challenging in terms of profitability
- Better cash flow: Freeing up funds and ensuring a free flow of money through the business to enable swifter and more seamless growth and minimise borrowing.
Financial business objectives are straightforward on paper. But beyond the monetary values these bring, how else can they benefit your business?
Well, the more money you can make (and retain), the more you can invest in the non-financial aspects of the business that in turn, directly feedback into and enhance the finances.
When financial and non-financial business objectives work cohesively together, you can start to see real change and tangible results for your company.
Bottom line: it’s not just how much money you make, but how wisely you invest it in alignment with non-financial objectives that help secure long-term success.
Need expert advice on implementing OKRs and steering your business in the right direction using a holistic, 360 approach and informed strategic planning? Speak to our Giants today for a friendly, informal overview of what we can do for you: