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Business Survival and Growth BTEC Business

Business Survival and Growth BTEC Business. Where’s the Profit?. Profit is one of the rewards of setting up in business It pays back the business owner for taking an entrepreneurial risk Profit is the money that’s left after you’ve taken away your costs from your sales revenue

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Business Survival and Growth BTEC Business

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  1. Business Survival and GrowthBTEC Business

  2. Where’s the Profit? • Profit is one of the rewards of setting up in business • It pays back the business owner for taking an entrepreneurial risk • Profit is the money that’s left after you’ve taken away your costs from your sales revenue Profit = Sales - Costs

  3. Costs and Revenues 1 • Developing your product or service • Researching your market • Buying raw materials • Finding premises • Recruiting staff Even before you sell anything, your business will have costs:

  4. Costs and Revenues 2 • You calculate revenue by multiplying the number of items sold by their price • Once you deduct all your costs from your revenue, you have the profit you have made • More on this can be found at: http://www.bized.ac.uk/learn/business/accounting/busaccounts/notes/oprof-ex.htm

  5. Overview of Profit Profit is: The difference between costs and revenues • The reward to the entrepreneur for taking a risk • The ‘return’ on the money used to run a business • A sign that people want to buy the product/service

  6. Objectives over Time • Survival • Financial security • Market growth • Image • Meeting the aims of stakeholders (see http://www.bized.ac.uk/glossary/glossary.htm to search for a definition and follow URL links)

  7. Market Share Growing businesses usually take a greater share of their market. This may give them: • More security • More profit (?) • Greater control in their market… but also, • More demands on their time and resources • Additional activity?

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