Infact profit is the oil which drives the wheels of business. Objectives to be fulfilled by business other that profits are: 1. The above is just a partial list of what lack of profit does for a business. It is a reward for a risk successfully undertaken. Main objective of business is to run business according to demand we not always see for profit we have to see increase business our profit automatically increase. Otherwise, it will eventually become insolvent. Privacy Policy3. In all business undertakings in the private sector, the main motive is to earn profit. In fact profit making is the primary objective for which a business unit is brought into existence. Maximum profit was achieved at the output at which marginal cost is equal marginal revenue. Profit is required to meet the individual as well as the social requirements of the trader. Profit maximization is also the traditional and narrow approach, which aims at, maximizes the profit of the concern. Great business profits is an indication from a society that the company is providing things that they want. Profit is also necessary for the expansion and growth of business. Before publishing your Articles on this site, please read the following pages: 1. The role of profit in business can be judged from the following points. Profits enable a businessman to stay in business by maintaining intact the wealth producing capacity of its resources. In practice firms have been found to be pursuing objective other than profit maximisation. Copyright © 2015 PublishYourArticles.Net, All rights reserved. Other Maximization Objectives. If their well being is not taken care of, then the company seizes to exist. The primary motive of the business is to earn profit because it provides stimulus to human efforts in undertaking business activities. Profit is how you build something you can sell. The objectives are: 1. Every business is started to earn profits as it is essential for the survival and growth of business enterprises. Driving revenue and proving consistent profitability is a major goal for any business. If I ask the question, is earning the sole objective of business? III. Profit maximisation – try to make the most profit possible – most like to be the aim of the owners and shareholders. II. Disclaimer Copyright. A business which is mainly motivated for the making of money seldom grow well in the long run and never commands respect in the society. Here you can publish your research papers, essays, letters, stories, poetries, biographies and allied information with a single vision to liberate knowledge. It leads to a number of corrupt practices. Profit is distinct from revenue. A business objective, on the other hand, is a measurable step people take to achieve that goal. Every business aims to earn a reasonable profit in order to survive and grow in this competing world. The goal of every business should be to earn profits, this however should not be treatedas the sole objective of the business.A business should earn profit but not to ignore: 1. It lowers the human values because the state of increased profit will lead to a materialistic society. Profit and economic development are closely related with each other. It is a primary goal and long term future health of your business. Traditional theory assumes profit maximisation as the sole objective of a business firm. As such the “Purpose of Business” became profit maximization. Without profits, the business simply is not viable. Profit making should be the primary objective of the business because of the following reasons: I. Large firms pursue such goals as sales maximisation, revenue maximisation, a target profit, retaining market share, building up the net worth of the firm, etc. Because of this reason the earning of profit occupies uppermost position in the minds of the businessmen. Profit Maximization Objective 2. IV. II. A business concern is also functioning mainly for the purpose of earning profit. Profit maximisation is a variation of the profit objective. V. Profit is regarded as a good measure of efficiency of the organisation because the performances of a business unit is judged from the angles of profit. Most people go into business for some benefit or value creation. Due to this reason, it has been rightly observed that profit is the acid test of the business unit. If there is no economic development there is no profit to the business. The following are the economic objectives of a business: Every business is started for earning profit because profit is the acid test of every business. Profit earning should be regarded as the main objective of business unit. What are the main objectives of a business. Profit earning should be regarded as the main objective of business unit. The business can be continued when there is a fair profit. However, what that value is and to whom it accrues is an important consideration. The business goals must then align with this foundation. If we increase our business our profit automatically increase.if our only aim is to earn then we can't do progress in business.our business will always there. so every business has the objective of production of goods. Profit is the driving force before and after entering into the business field. VII. Here are 11 reasons why profit is essential to the longevity, growth and safety of the business: Essential for survival – Any entity cannot spend more money than it takes in. III. The primary task of business is to provide adequately for the cost of staying in business. The need of profit in business is left to cover the cost of production and also create a surplus for undertaking expansion and diversification work. Profit is the measuring techniques to understand the business efficiency of the concern. A business does not have to make a profit if the business owner does not mind operating the business with funds from other sources and losing money on it over the course of time. Main aim of any kind of economic activity is earning profit. Investors invest their money in the business with the sole purpose of earning profit, since profit is a source of income, it is therefore provides the owners of business the mean with which they and their family members can live a comfortable life. Earning of profit should be the objective of business units. Value Maximization Objective 4. The business objective is a goal, i.e. Economic theory often assumes that firms are rational profit maximisers. But what good does a profit do? However, the business should not have the objective of maximization of profit because it leads to exploitation of the consumers. 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