The Performance of a Business
Do businesses really control their resources closely? Give reasons for your answer.
Businesses do control their resources closely, this is because:
Human resources: this is needed in the business and is also monitored because if some stuff isnt doing their work correctly then they are likely to be replaced with someone that is better. If the business is to expand then the business needs to employ staff with certain ability that will benefit their business.
Financial resources: businesses have to monitor their finance because; they need to insure that they have enough money in order to buy products and to pay their employees. They then also have to make sure that they have enough money so that they can pay off their bills as well.
Physical resources: this may be necessary if the business has to have publicity for example; need to have a branch. More customers are likely to join your firm, if you have a branch and by this the finance will increase. In a business computer systems will also be needed as this speed up things and any calculations that the business has.
In my opinion by using breakeven for a business in the real world is a advantage because it isnt complex to do and the results are presented fast and another advantage of breakeven analysis is that it does not cost to make it.
By using breakeven analysis it shows the business how many units are still needed to be sold before the business reach their investments. Breakeven then can summarize what the businesses profit is going to be with the remaining units.
Some small businesses dont think of using breakeven analysis because the calculations are not too big and because they estimate their data. They would usually get the product that will sell in a lot, they buy the product in quantity in order to get it cheaper and insure they are saving enough money from every unit that they sell. People that own the property dont get concerned about the rent and they mainly focus on making the profit by selling a unit.
Major organisation like: Tesco, Sainsburys and Asda, they might consider using the breakeven analysis because they are around the UK and they need to know about their turnover for the financial years.
Budgets are necessary in every business whether the business is small or large. A small business that has just of 2 people working will set themselves budget for example; for this financial year the business needs to spend £60k and want £80k of a turnover. Large businesses will also do the similar however as its a large business they rather spend in millions and not in thousands or hundreds so in order for them to receive cheaper priced units and have a