Organizations’ Long-Term Goals and Objectives
Every organization or business has aspirations and future positions they want to occupy as compared with competitors. The future image is broken down into long-term goals and objectives, to which all business operations are aligned. According to the video “9 Startup Funding,” long-lasting objectives are performance goals of a business intended to be attained over a long period, mostly more than five years. They usually include the organization’s profitability, return on investment, employee relations, corporate image, technology leadership, and competitive positions, among others that are industry-specific.
A food processing company will be considered in its initial stages of development. Such an organization could have started small, serving the local market through retail shops or wholesales within a limited geographical coverage. During its first stages, a food processing firm focuses on short-term objectives, mostly for survival and growth, but it must have a bigger picture of the future. Their long-term goals would include becoming a global leader in food processing, attaining high profitability and opening other branches, and gaining leadership in technology by automating its operations and utilizing e-commerce. The company could also aim at becoming a socially responsible organization with outstanding ethical performance, have the best workforce and enhanced employee relations, and outcompete rivals through product differentiation.
Similarly, the long-term goals of a food processing company are immense and capital-intensive. First, it might seek to attain 5 million profits by the end of five years and to have 10000 million tons of sales annually for a couple of years. The firm could also reduce employee turnover by 5% yearly apart from engaging in various corporate social services for five years, according to “9 Startup Funding Options” (00:00:00-00:01:00). Finally, a food processing company should seek to enlarge its market share by a certain percentage as one of its long-term objectives.
Funds Needed to Achieve the Firm’s Long-Term Goals and Objectives
To achieve long-term objectives, each organizational activity requires enormous funds, including employee training costs and development, to reduce turnover, and improve employee relations. Marketing funds are also needed to attain a high market share and increase sales volume. The company requires funds for logistics, storage, and transportation of products, apart from that required for product differentiation to gain competitive advantage (“9 Startup Funding Options” 00:00:00-00:05:00). Resources for expansion and growth, technology (system and software installations and computers), physical development of the processing units, and general maintenance of the premises demand large funds. Finally, the organization requires establishing regional and international distribution centers and branding and packaging products for export.
Sources of Long-Term Funding (Capital) Available and the One’s Fitted Best Organizational Needs
There are nine significant sources of funding that can be used by the organization to achieve the long-term objectives and goals, and each has unique requirements. The “9 Startup Funding Options” (00:01:00-00:03:10) shows that banks lend money to organizations in the form of loans. For an organization to qualify for funding, it must have high net worth equity as collateral, a well-developed business plan, and a credit score above 700 (“9 Startup Funding Options” 00:00:40-00:00:50). However, funding by banks is difficult and slow and, therefore, not appropriate for an emergency. Banks also have Community advantage and microloan – they offer loans to small businesses amounting to $250.000 and $50.000, respectively (“9 Startup Funding Options” 00:01:30-00:02:15). An organization must have saved 30% of its earnings to qualify and possess managerial and industrial experience.
Additionally, rollover for business startups are sources of funds without penalties or interest, but a firm must have a minimum of $50.000 in their retirement account. Third, home equity loans and credit loans mean money is backed by homes and has the lowest interest rate, but owners must have 15% equity and a credit score over 620 (“9 Startup Funding Options” 00:02:20-00:02:30). Moreover, more flexible credit cards have cashbacks, and users are rewarded every time they use them. The fifth source includes microloans from nonprofit lenders, and to qualify, a company must have a cosigner and an independent source of income. Another funding option is a peer-to-peer loan provided online through investors willing to participate in the business depending on the organization’s financial status and credit score. Family and friends offer money, and, to ensure the trust is built, a business plan and a promissory note are required.
Further, Crowd Funding involves raising small amounts of money from many people through fundable, Kickstarter, and rocket hubs. It is favorable for businesses offering consumer goods – lastly, Angel investors, and venture capital – funding from wealthy individuals and other companies’ source income. To qualify, an organization must have a business plan, financial projections, return on investment of about ten times, and high internal control levels.
According to the food processing company’s objectives and goals, the right funding is bank loans because the purposes require large amounts of money, which banks can provide since other sources offer relatively lower parts. It is also appropriate because the company has five years to accomplish the objectives, and, therefore, the slow procedure in funding will not affect its operations. The organization will spend its first years establishing a good credit record, making collaterals, and then preparing a business plan.
Overall, an organization’s objectives are essential in guiding its operations and for financial planning. However, huge funds are required to achieve them, and most startup businesses do not have them. The options available for funding are disparate, including bank loans, borrowing from family members and friends, microloans from nonprofit lenders, and crowdfunding. Further, a company can consider using credit cards as they offer flexibility, cashback, and rewards. The right selection can help an organization to quickly achieve its goals.
Work Cited
“9 Startup Funding Options – Business Loans + More.” YouTube, uploaded by FitSmallBusiness, 2020. Web.