Setting Business Aims & Objectives Practice Questions

Item A: Wickmere Candles Ltd

Imogen set up Wickmere Candles Ltd five years ago in Carlisle. The business hand-pours scented candles, which are sold through its own website and to 60 independent gift shops. It now employs 14 people.

For the first two years, Imogen's only objective was survival because the business was short of cash. Now that Wickmere is established, Imogen sets objectives at the start of each year and discusses them with every employee at a monthly meeting.

Wickmere's objectives for last year were:

• to increase revenue by at least 15%
• to increase its share of the UK scented candle market to 4%
• to use only recycled glass for all of its candle jars by the end of the year.

Table 1 Wickmere Candles Ltd performance

	Two years ago	Last year
Revenue	£420 000	£504 000
Share of UK scented candle market	3%	3.4%
Candle jars made from recycled glass	45%	100%
Customer complaints per 1000 orders	18	11

Item A: Verrow Cycles Ltd

Lena Verrow started Verrow Cycles six years ago in a rented unit in Leeds, repairing and selling second-hand bicycles. For the first two years her only objective was survival. The business broke even in year two and has grown since. It now employs 22 people, assembles its own range of electric bikes and has opened a second shop in Sheffield.

In 2024 the business became a private limited company, Verrow Cycles Ltd. Lena's current objectives are to increase the market share of the business in the North of England and to buy all of its bicycle frames from suppliers that use recycled aluminium.

Year	Revenue (£000s)	Net profit (£000s)	Share of the North of England cycle market
2022	310	12	3%
2023	448	29	4%
2024	602	41	6%

Two national cycle retailers have recently opened stores within five miles of the Sheffield shop and are offering large discounts. The cost of the battery units that Verrow Cycles Ltd imports has risen by 18% in the last year. An investor has told Lena that he would buy 30% of the shares in the business, but only if Verrow Cycles Ltd set a target of doubling its profit within three years.

Item A: Tidewell Café

Tidewell Café is a small café in the seaside town of Whitstead. It was opened in 2022 by Jaya Mistry, who had worked as a chef in a hotel chain for eleven years. Jaya wanted to be her own boss and to decide herself which dishes appeared on the menu, rather than cooking from a menu written by a head office. Working close to home also means she can collect her son from school.

Tidewell serves breakfasts and lunches made with ingredients from farms in the area. There are four other cafés in Whitstead. Jaya's first aim was for Tidewell to still be trading after twelve months. In Year 2 she added an outdoor seating area and began opening on Sunday mornings.

Table 1: Revenue in Whitstead

	Year 1	Year 2
Tidewell Café revenue	£96 000	£120 000
Total revenue of all cafés in Whitstead	£800 000	£1 000 000

Jaya is now deciding what the main objective of Tidewell Café should be in Year 3. She is considering an objective of increasing its market share.

Item A: Pinfold Sewing Studio

Pinfold Sewing Studio is a sewing school in Stockport. It was set up in 2023 by Nadia Rahman, who had spent nine years as a pattern cutter for a clothing manufacturer. Nadia wanted to make her own decisions about what she did and when she worked, instead of following a production schedule set by someone else, and she wanted the challenge of building something of her own.

Pinfold Sewing Studio runs evening classes for adults at £28 a session and sells fabric and sewing kits from a small shop at the front of the studio. Nadia used £9 000 of personal savings to buy eight sewing machines and to pay six months' rent in advance on the unit.

Nadia's first aim was for Pinfold Sewing Studio to still be open after one year. For the second year she has set a target of selling 40 class places every week by the end of that year, and she is considering making growth, rather than survival, the main objective. Pinfold Sewing Studio has two competitors within five miles, one of which charges £22 a session.

Item A: Lacquerline Nails

Lacquerline Nails is a nail salon in Swansea owned by Carys Lloyd, a sole trader. Carys left a salaried job at a large city-centre salon and used £6 000 of her savings, together with a £5 000 bank loan, to fit out a small unit on a busy shopping street. The salon offers manicures at £22 and gel extensions at £38.

Carys set herself aims for her first two years of trading. Her financial aims were for Lacquerline Nails to survive its first year and then to increase sales revenue by 20% in year two. She also wanted the independence to choose her own working hours so that she could collect her daughter from school, and she has promised to offer a paid training place each year to a school leaver from the local area.

Rent on the unit is £680 a month and Carys employs one full-time nail technician. Two new nail salons have opened within a mile of Lacquerline Nails in the past year, and one of them charges £16 for a manicure. Several customers have asked Carys to open on Sundays, but this would mean paying overtime and giving up time with her family.

Table 1: Sales revenue and total costs for the first six months

Month	Sales revenue	Total costs
April	£4 100	£4 600
May	£4 650	£4 550
June	£5 200	£4 700
July	£5 050	£4 650
August	£3 800	£4 400
September	£4 900	£4 700

Carys is now deciding whether to keep the objective of increasing sales revenue by 20% in year two.