Relationship Between Objectives & Budgeting

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The professional objectives of a given company often are classified as the goals of the business. Objectives can be both long-term and short-term, and may appear unrealistic at the time of creation. However, a company’s objectives often depend on various factors, including the company’s workforce, available resources and budget. While some people may not realize it, budgeting plays a large part in how a company accomplishes objectives within a reasonable time.

Interconnected Relationship

  • The relationship between a company’s objectives and the operational budget is considered interrelated. This is because a company’s budget often will influence the objectives and the objectives may be influenced by the available funds in the company’s budget. Although the objectives often are planned without any consideration to the budget, it also can be done in reverse order. Objectives often are planned without consideration to the budget, so the business owner can set large goals that may seem unrealistic at the time.

Planning Objectives According to Budget

  • Planning objectives according to the available funds in the budget can end up becoming a constraint for the business. If the business only has $200 left over each month, the objectives are limited and may only include getting some equipment for the office. If the objectives are not larger and long-term, the business may not grow as much as the smaller goals are frequently met.

Short-Term Objectives

  • Short-term objectives are those goals that can be reached within a shorter period, whether it is within a month or less than five years. Short-term objectives include paying off start-up company loans, establishing a website, marketing existing products and hiring new employees. Most objectives related to growing or expanding a business are related to the budget, whether the objectives involve available funds or saving additional funds in the operation budget.

Long-Term Objectives

  • Long-term objectives are goals that the business plans to reach within the following five to 10 years or longer. These goals may appear unrealistic at the time of inception, but can be reachable with the proper objective planning. Examples of long-term objectives can include expanding the existing line of products or services, increasing the profit by three times the current profit or by opening three new offices on a local plan within the next 10 years. All long-term objectives in this case are possible if funding is available in the budget.

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