Deca

Types of Costs

1. Direct Costs:

   • Definition: Costs directly tied to production (e.g., raw materials, labor).

   • Example: Wages and parts used to build a car at Ford.

2. Indirect Costs:

   • Definition: Costs not directly linked to production (e.g., utilities).

   • Example: Electricity to power Ford's plant.

3. Opportunity Costs:

   • Definition: Potential profit loss when choosing one option over another.

   • Example: Buying new equipment vs. leasing it and using extra funds to pay debt.

4. Intangible Costs:        

   • Definition: Non-quantifiable costs related to non-financial impacts.

   • Example: Hiring an unproductive worker.

5. One Time Cost:

   • Definition: Costs paid once.

   • Example: Legal fees for acquiring another company.

6. Hidden Costs:

   • Definition: Unexpected costs that arise later.

   • Example: Taxes added to a purchase.

Stakeholder Expectations

• Stakeholders:  person with an interest or concern in something, especially a business.

  • Internal Stakeholders: Employees, managers, board members.

  • External Stakeholders: Customers, suppliers, government agencies.

• Managing Expectations:

  • Identify Stakeholders: Understand their impact and influence.

  • Clear Communication: Regular updates build trust.

  • Early Engagement: Involve stakeholders from the start.

  • Set Realistic Goals: Transparency about challenges.

  • Monitor Involvement: Adjust strategies based on engagement.

Organizational Risk Assessments

1. Risk Assessment:

   • Definition: Identifying and analyzing potential risks.

   • Purpose: Implement measures to control risks based on likelihood and impact.

2. Types:

   • Large Scale: For complex hazards (e.g., nuclear, oil industries).

   • Required Specific: Legal requirements (e.g., handling hazardous substances).

   • General: Workplace risks (e.g., health and safety management).

3. Steps:

   • Identify Hazards: Survey workplace and report.

   • Evaluate Risks: Assess likelihood and consequences.

   • Control Measures: Implement safety controls.

   • Documentation: Keep records of assessments.

   • Review and Update: Follow up and reassess as needed.

Workplace Incident Reporting

• Benefits:

  • Investigate Causes: Helps managers understand the root causes of incidents.

  • Address Safety Issues: Improves workplace safety by addressing identified issues.

  • Clear Procedures: Establishes consistent procedures for reporting and handling incidents.

• Employee Judgment: Clear guidelines improve consistency in incident reporting.

Direct Mail Marketing

• Advantages:

  • Targeted Audiences: Allows marketers to reach specific groups.

  • Cost-Effective: Often cheaper than personal selling or TV ads.

• Broad Audience Reach: Can deliver messages widely but may lack interactivity of digital methods.

Calculating Employee Productivity

• Productivity Formula: Total output (in dollar value) / number of employee work hours.                                                                                                                    

• Productivity Metrics: Helps evaluate team performance and operational efficiency.

Push and Pull Marketing Strategies

• Push Strategy: Focuses on pushing products through distribution channels, often to retailers.

• Pull Strategy: Engages consumers directly to create demand, often through advertising or promotions.

• Marketing Mix: Combining push and pull tactics can strengthen a marketing campaign.

Negotiation Strategies

• Effective Negotiation: Involves give-and-take tactics for mutual satisfaction.

• Time Management: Adequate decision time promotes fair negotiations; high-pressure tactics may create conflict.

Cost of Goods Sold (COGS)

• COGS Calculation: Beginning inventory + purchases - ending inventory.

• Importance of COGS: Helps determine gross profit and manage inventory effectively.

Marketing Plans

• Purpose: Provides a roadmap for reaching company objectives and maintains focus on long-term goals.

• Contingency Planning: Considers potential corrective actions for unexpected events.

Capital Expenditures

• Capital Expenditure Definition: Significant investments in assets, such as new buildings or equipment, that benefit the business over the long term.

• Operating Expense vs. Capital Expenditure: Capital expenses differ from regular operational costs, as they are long-term investments.

Competitor Analysis

• Secondary Data for Competitor Insights: Using data from published sources can reveal competitor strategies without direct interaction.

• Internal Efficiency: Evaluating internal processes like intranet efficiency doesn’t reveal competitor activities but improves operations.

Key Performance Indicators (KPIs)

• Aligning KPIs with Objectives: KPIs should reflect the goals of the business, ensuring performance is measured against relevant targets.

• Corporate Culture and KPIs: While KPIs align with objectives, corporate culture can indirectly influence performance metrics.

Confidentiality and Non-Disclosure

• Non-Disclosure Agreements (NDAs): NDAs prevent former employees from sharing sensitive information with competitors.

• Intellectual Property Protections: Patents and copyrights are legal tools to protect proprietary knowledge, but they differ from confidentiality agreements.

Business Ownership Structures

• Corporations: Though they make up a minority of business types, corporations generate the majority of sales.

• Other Structures: Sole proprietorships, partnerships, and LLCs are common structures with distinct legal and tax implications.

Industrial vs. Consumer Goods

• Industrial Goods: Goods sold to companies that use them for production rather than directly to consumers.

• Consumer Goods: Products sold directly to the end consumer for personal use.

Ethical Business Practices

Misuse of Company Resources: Using company assets for personal purposes is generally considered unethical.

• Employee Ethics: Ethical guidelines help maintain a professional workplace and protect company resources.

Financial Growth and Expansion

• Financial Steps for Established Businesses: When ready, businesses might expand by purchasing additional locations, setting financial goals, or diversifying product offerings.

• Startup vs. Expansion Funding: Established companies typically don’t seek startup funds but focus on growth investments.

Economies of Scale

• Economies of Scale Definition: As production increases, fixed costs per unit decrease, improving profitability.

• Variable vs. Fixed Costs: Fixed costs like rent or salaries remain constant, while variable costs fluctuate with production levels.

Business Process Improvements

• Technology and Efficiency: New technology can streamline processes, reduce costs, and improve return on investment.

• Process Simplification: Automating tasks increases efficiency across departments, leading to time and cost savings.

Role of Intermediaries\

• Intermediary Functions: Intermediaries buy in bulk and sell in smaller quantities, helping reduce per-unit costs.

• Consumer vs. Business Intermediaries: They work with both business-to-business and business-to-consumer channels to streamline distribution.

Innovation through Knowledge Sharing

• Diversity of Ideas: Exposure to diverse perspectives fosters creativity, leading to innovative solutions.

• Organizational Learning: Businesses benefit when employees share knowledge, as it contributes to continuous improvement and adaptation.

Change Management

• Definition: The process of guiding individuals, teams, or organizations through a transition to achieve desired outcomes.

• Key Steps: Planning the change, supporting team members through the transition, and ensuring successful integration.

  • Example: Managing the adoption of new software or systems within a team or organization.

Press Kit Essentials

• Purpose: A press kit provides the media with detailed information about a business and its key figures.

• Key Components: Biographies, promotional messages, customer testimonials, media content. 

Market Research and Sales Data

• Sales Team Insights: Sales data can reveal information about:

  • Customer Demographics: Current and potential customer profiles.

  • Sales Trends: What products are popular and who is buying them.

  • Competitor Awareness: Understanding what competitors are offering helps refine marketing strategies.

• Data Collection: Essential for aligning marketing and product development with market demand.

Corporate Governance

• Purpose: Ensures accountability, fairness, and transparency in a company’s management.

• Core Principles:

  • Checks and Balances: Prevents any one person from having too much power within the organization.

  • Social Responsibility: Balances profit-making with social and ethical concerns.

  • Applicability: While more common in larger companies, even small businesses benefit from basic governance practices.

Pricing Strategy

• Post-Production Pricing: Pricing should reflect:

  • Market Demand: Ensures products are priced to attract customers.

  • Competitive Pricing: Keeps the product competitively priced in the market.

  • Profit Margins: Should allow for a reasonable profit without setting prices too high.

Government Support for Business

• Methods of Support:

  • Subsidies: Financial assistance provided to businesses to encourage growth in specific sectors.

  • Tariff Reductions: Lowering tariffs on imports can reduce costs for businesses, promoting growth.

  • Grants and Loans: Financial programs aimed at small businesses and startups.

Employee Information Reporting

• Federal Reporting Requirements:

  • Address: Basic personal information, including address, must be reported for record-keeping and tax purposes.

  • Identification Information: Includes Social Security numbers for tax and payroll records.

Financial Statements for Staffing Decisions

• Profit-and-Loss Statements: Helps businesses evaluate if they have sufficient funds to hire additional staff.

• Income Statements: Tracks revenue and expenses to assess overall profitability, which can impact hiring capabilities.

• Cash Flow Statements: Shows available liquid funds for operational expenses, including staffing.

Process Design Factors

• Human Factors: Designing work schedules or processes often considers human needs, like reasonable working hours and breaks.

• Technological Factors: Technology advancements can influence the capacity for 24-hour operations or automated systems.

• Regulatory Factors: Compliance with labor laws and regulations may limit work schedules and influence process changes.

Digital Advertising & Consumer Protection

• Digital Ad Blocking:

  • Ad-Blocking Software: Prevents intrusive ads from appearing in users' browsing experience.

  • Spam Filters: Filters out unwanted emails, such as promotional or spam messages.

  • Privacy Tools: Help users control exposure to digital marketing.

Distribution Channel Selection

• Product Considerations:

  • Perishability: Products that expire quickly (e.g., food) require faster, more efficient distribution channels.

  • Intensity: How widely the product should be distributed (e.g., exclusive vs. intensive distribution).

  • Segmentation: Choosing distribution channels that align with specific market segments.

Business Efficiency & Analysis

• Business Analysis for Efficiency: Evaluates methods or technologies to improve performance.

  • Example: Installing new software to increase output or streamline processes.

  • Efficiency Focus: Maximizing productivity and reducing unnecessary time or costs in operations.

Cost Reduction Strategies

• Variable Costs: Often the first target for reduction, as they fluctuate based on production levels (e.g., raw materials, utilities).

• Fixed Costs: These remain constant, like rent and salaries, but are generally harder to adjust in the short term.

• Operating Costs: Includes day-to-day expenses that can sometimes be reduced to lower total expenses.

Control Mechanisms in Business

• External Controls: Industry standards and regulations ensure companies operate within certain guidelines.

  • Example: Adhering to industry standards for safety or environmental impact.

• Internal Controls: Measures like segregation of duties reduce the risk of errors or fraud by distributing responsibilities.

Types of Competitors

• Indirect Competitors: Businesses that serve similar customer needs with different products (e.g., Starbucks vs. American Eagle, where both compete for consumer spending, but in different categories).

• Direct Competitors: Companies offering nearly identical products to the same market (e.g., McDonald's vs. Burger King).

Internal Teams and Innovation

• Cross-Functional Teams: Teams from different departments working together to identify new product opportunities or solve problems.

  • Benefits: Diversity of ideas, continuous innovation, and ability to address complex challenges from multiple perspectives.

Corporate Governance and Internal Factors

• Segregation of Duties: Dividing responsibilities to prevent conflicts of interest or fraud within governance structures.

• Internal Governance Factors: Include organizational policies, structure, and company culture, impacting decision-making and ethical standards.

Debt Financing

• Advantages: Allows control over spending and doesn’t dilute ownership.

• Responsibility: Borrowers are required to repay with interest, regardless of business success.

Employee Selection Tools

• Performance Simulation Tests: These tests allow employers to see how candidates perform specific job tasks (e.g., operating a cash register).

• Purpose: Measures practical job skills and helps predict on-the-job performance.

Exit Strategies in Business

• Creating Value for Buyers: When planning to sell, it’s important to develop the business in a way that attracts potential buyers by enhancing its profitability, reputation, and market position.

Brand Promise and Customer Experience

• Consistent Experiences: Ensuring that every interaction meets customer expectations reinforces trust and brand loyalty.

• Delivering on the Promise: Fulfillment of brand promises is key to building a strong, reliable reputation in the market.

Interactive Public Relations

• Social Media: Engages customers directly, allowing for real-time interaction, feedback, and brand building.

• Benefits: Builds brand visibility, fosters customer relationships, and enhances brand loyalty through consistent engagement.

Supply Chain Management

• Key Activities: Encompasses the coordination of production, shipping, and distribution to ensure products reach customers efficiently.

• Goal: Minimize costs, improve delivery times, and manage inventory levels effectively.

Innovation Strategy

• Reducing Risk: Ensuring resources are sufficient to support a new idea before launching it.

  • Example: Confirming market demand and securing necessary funding helps lower the chance of failure.

Financial Statements: Balance Sheet

• Current Assets: Includes items that are expected to be converted into cash within a year, such as inventory and accounts receivable.

• Purpose: Provides insight into a business's liquidity and short-term financial health.

Selling's Role in the Economy

• Adding Utility: Selling activities ensure that products are available where and when customers need them, which adds value to the product.

Economic Conditions and Sales Forecasting

• Influencing Factors: Local economic conditions, such as layoffs or reduced production, impact consumer spending and business projections.

Entrepreneurial Risks

• Emotional Risk: Sacrificing personal time and relationships due to business demands is a common challenge faced by entrepreneurs.

Data Analysis in Business

• Data Mining: Analyzing historical data to identify trends and forecast future performance, crucial for strategic planning.

Communication of Policy Changes

• Employee Awareness: When policies change, it’s vital that employees acknowledge and understand the new guidelines. Methods include having them sign an acknowledgment or discuss the policy to confirm comprehension.

Legally Binding Contracts

• Examples: A signed purchase agreement or a software license agreement, which legally binds both parties to specific terms.

Leasing vs. Buying

• When to Lease: Leasing is often more economical when cash flow is limited or when businesses need flexibility without the long-term commitment of ownership.

Motivations for Entrepreneurship

• Flexibility: One of the primary reasons individuals choose entrepreneurship is for the ability to control their schedules and work-life balance.

Types of Buyers in Retail

• Retail Buyers: Purchase goods from suppliers to sell directly to end consumers, unlike wholesale buyers who resell to other businesses.

Data Analytics in Business

• Prescriptive Analytics: Goes beyond prediction to recommend specific actions based on data insights.

  • Example: Suggesting optimal inventory levels based on forecasted demand and supply chain conditions.

• Predictive Analytics: Forecasts future trends based on historical data (e.g., predicting customer purchasing behavior).

Marketing Strategies

• Adaptable Marketing: Strategies should be flexible and responsive to changes in the marketplace to maintain relevance and competitive edge.

  • Key Principle: Markets evolve, so strategies should too, allowing businesses to adapt to shifts in customer needs, competition, and economic conditions.

Quality Control vs. Quality Assurance

• Quality Control: Focuses on inspecting products to identify defects (e.g., rejecting defective glass bottles).

• Quality Assurance: Involves establishing processes to prevent defects in the first place, ensuring quality throughout production.

Enterprise Risk Management (ERM)

• Comprehensive Approach: ERM is an all-encompassing strategy to identify, assess, and manage risks across the entire organization.

  • Purpose: To protect the company from a wide array of potential threats, including financial, operational, and reputational risks.

Goal Monitoring and Achievement

• Progress Monitoring: Increases the likelihood of achieving goals by keeping you on track, allowing for adjustments, and providing motivation.

Purchase Orders

• Purchase Order (PO): A legally binding document specifying the items, quantities, and agreed-upon prices for goods or services the buyer intends to purchase from the seller.

Ethical Workplace Behavior

• Ethical Action: Addressing unfair treatment by speaking up to promote fairness and respect in the workplace.

Strategic Partnerships

• Strategic Relationship: Two or more businesses cooperating to achieve mutual benefits, such as shared warehouse space to reduce costs.

Employee Assistance Programs (EAPs)

• Purpose of EAPs: Provide support for employees in areas like career development, mental health, and education, helping them overcome personal or professional challenges.

Innovation from Experience

• Work Experience as Inspiration: Real-world experiences often reveal opportunities for new products or services.

  • Example: Identifying a need for an automated payment system for restaurants based on firsthand work as a server.

Product Line and Product Mix

• Product Line: A group of related products marketed by the same company (e.g., Kraft's dairy products or juices).

  • Product Mix: The entire range of products a company offers.

Marketing Research Techniques

• Observation Method: Collects data by observing customer behavior in natural settings, useful for understanding purchasing habits without direct interaction.

Administering Remedial Action

• Effective Remedial Actions: Should be private, timely, and followed by a return to normal interaction, maintaining a professional and respectful environment.

Employee Performance Evaluation

• Management by Objectives (MBO): Sets specific goals for employees and evaluates performance based on the achievement of these goals.

  • Goal: To align individual performance with company objectives, providing clear metrics for success.

Production Planning and Continuity

• Continuation Planning: Ensures production can continue despite disruptions by shifting resources to alternative locations.

  • Example: Moving production to a different facility during a natural disaster.

Vision Setting in Business

• Short-Term Vision Pitfall: A six-month vision, like becoming a top-rated cupcake shop, may lack long-term stability, making it harder to sustain progress after initial goals are reached.

  • Ideal Vision: Should be both aspirational and sustainable over time to guide the company's growth and direction.

Market Dynamics

• Periodic Market Checks: Essential because markets constantly evolve with trends, technology, and consumer preferences.

  • Outcome: Helps businesses stay relevant and competitive.

Hardware and Software Specifications

• Key Specifications: Businesses should prioritize compatibility, reliability, and cost-effectiveness when choosing tech solutions.

  • Example: Ensuring software compatibility with existing systems to minimize downtime.

Demand Elasticity in Pricing

• Elastic Demand: When small price changes significantly impact customer demand.

  • Hotel Pricing Strategy: Hotel chains adjust prices based on economic and competitive conditions, as customer demand is responsive to price changes.

Customer Influence on Pricing

• Consumer-Driven Pricing: Ultimately, customers determine acceptable price levels by their willingness to buy.

Business Process Thinking

• Process-Oriented Planning: Involves mapping out each step to achieve a project’s objectives, ensuring clarity and efficiency.

Customer Relationship Management (CRM)

• CRM Insight: Customer purchase history helps companies personalize offerings and predict future preferences.

Startup Expenses

• Professional Fees: Costs like legal fees, trademarks, and permits are essential for setting up business foundations.

Entrepreneurial Qualities

• Adventurous Spirit: Entrepreneurs often face risks and uncertainty, requiring adaptability and a willingness to explore uncharted territory.

Operations Management

• Cost Control Focus: Operations managers prioritize efficient spending to optimize resources and maintain profitability.

Ethics in Startups

• Entrepreneurial Responsibility: In small companies, ethical behavior largely depends on the entrepreneur’s example and actions.

Report Navigation

• Table of Contents: Aids readers in quickly locating sections in lengthy reports, especially useful in formal documents.

Cash Flow Calculations

• Total Cash Available: Beginning balance + cash receipts (excluding credit sales) = available funds for expenses and investments.

Expanding Product Mix

• Product Line Extension: Adding complementary items, like notebooks to a paper goods line, increases variety without diverging from core offerings.

Supply Chain for Small Retailers

• Order-Based Supply Chain: Bookstores benefit from a system that purchases books based on demand to avoid excess inventory.

Market Segmentation

• Understanding Consumer Diversity: Recognizes that different segments have unique preferences and purchasing habits, enabling tailored marketing.

Demand Research

• Market Research: Helps entrepreneurs validate demand for new ideas before committing resources, reducing risk of failure.

Unique Selling Proposition (USP)

• Competitive Advantage: The USP addresses why customers should choose a product over alternatives, distinguishing the brand in a crowded market.

Income Statement Components

• Revenue: Core income from sales and services, key in assessing profitability and financial health.

External Promotion Factors

• Regulatory Impact: Advertising rules and regulations set by the government can restrict or guide promotional strategies.

Operational Considerations for Entrepreneurs

• Production Process: An essential factor in planning, it determines how products are created and delivered to customers.

Exclusive Distribution Strategy

• Luxury or Specialty Products: Items like high-end silk ties are often sold through exclusive channels to maintain brand prestige.

Financial Feasibility

• Funding Consideration: Ensuring a venture has adequate financial resources is crucial to sustaining operations and growth.

Staffing Decisions

• Payroll as Key Factor: Salaries, benefits, and payroll taxes significantly impact a small business’s financial resources.

1. Entrepreneurial Planning and Strategy

• Business Plan: A formal document outlining a business's goals, the strategy to achieve them, market analysis, and financial projections. Key sections include:

  • Executive Summary: Overview of the business concept.

  • Market Analysis: Understanding target customers and competition.

  • Marketing Strategy: Plan for reaching customers.

  • Operational Plan: How the business will operate.

  • Financial Plan: Budget, forecasts, and funding needs.

• Feasibility Analysis: Assessment of the viability of a business idea, including:

  • Market Feasibility: Demand and competition analysis.

  • Technical Feasibility: Resources and technology needed.

  • Financial Feasibility: Cost analysis and funding sources.

• Mission and Vision Statements:

  • Mission Statement: Defines the organization's purpose and primary objectives.

  • Vision Statement: Describes what the organization aims to achieve in the future.

2. Financial and Funding Knowledge

• Profit Margin: The difference between sales revenue and the cost of goods sold (COGS).

•  Break-even Point: The level of sales at which total revenues equal total costs, indicating no profit or loss.

  • Formula: Break-Even Point (units) = Fixed Costs / (Selling Price per Unit - Variable Costs per Unit)

• Cash Flow: The net amount of cash being transferred in and out of a business. Positive cash flow is crucial for sustainability.

• Funding Sources:

  • Equity Financing: Selling shares of the business (e.g., venture capital).

  • Debt Financing: Loans that need to be repaid with interest.

  • Grants: Funds provided by governments or organizations that do not require repayment.

3. Marketing Principles

• 4 Ps of Marketing:

  • Product: The goods or services offered to meet customer needs.

  • Price: The amount charged for a product; must reflect value and market demand.

  • Place: Distribution channels used to deliver the product to customers.

  • Promotion: Strategies to communicate with potential customers (advertising, public relations, sales promotions).

• Target Marketing: Identifying specific segments of the market to focus marketing efforts on based on demographics, psychographics, and behavior.

• Customer Segmentation: Dividing the market into distinct groups of buyers to tailor marketing strategies (e.g., geographic, demographic, behavioral).

4. Risk Management and Compliance

• Risk Mitigation Strategies:

  • Diversification: Spreading investments or products across different areas to reduce risk.

  • Insurance: Protecting the business from financial losses through various insurance policies.

  • Emergency Planning: Preparing for unexpected events (natural disasters, economic downturns).

• Legal Regulations: Understanding and complying with laws affecting the business, such as:

  • Business Licenses: Required permits to operate legally.

  • Consumer Protection Laws: Regulations to protect consumers against unfair business practices.

  • Employment Laws: Regulations regarding hiring, wages, and workplace safety.

• Ethical Decision-Making: Considering the moral implications of business decisions and striving for integrity and transparency.

5. Management and Leadership

• Management Styles:

  • Autocratic: Centralized decision-making; leader makes decisions unilaterally.

  • Democratic: Involves team input; promotes participation in decision-making.

  • Laissez-Faire: No government involvement.

• Team Dynamics: Understanding how individuals work together within a group, including roles, communication, and conflict resolution.

• Leadership Principles:

  • Vision: Effective leaders communicate a clear vision.

  • Motivation: Use of various strategies (incentives, recognition) to encourage employee performance.

  • Coaching and Mentoring: Supporting employee growth and development.

6. Customer Relationship Management (CRM)

• CRM Systems: Tools used to manage interactions with current and potential customers. Key components include:

  • Data Collection: Gathering information on customer preferences, purchase history, and feedback.

  • Customer Segmentation: Analyzing data to categorize customers for targeted marketing.

  • Customer Loyalty Programs: Incentives designed to retain customers and encourage repeat business.

• Importance of Customer Loyalty:

  • Loyal customers tend to spend more, provide referrals, and help stabilize revenue.

  • Building strong relationships through personalized communication and high-quality customer service can enhance loyalty.

• Unincorporated: Owner has the same legal entity as business. Any debt/legal issues are owners’ responsibility

• Liability: Legal debts a company owes to third-party creditors

• Economics of scale: Lowering average cost of production as firm operates on larger scale

• Incorporated: Legal difference between shareholders and business

• Stocks: Share in the ownership of a company

• Share capital: Money a company raises by issuing stocks

• Shareholders: Individuals/businesses that invest money to provide share capital

• Company: Businesses owned by shareholders

• Board of directors (BOD): People elected by shareholders to run company

Sole Proprietor: Individual owns an unincorporated business

• Pros: More profit, More control, Quick decision-marking

• Cons: Unlimited liability, High risks, Limited economics of scale

Partnership: Business owned by 2+ people, Shared liability, Partnership deed: legal contract that defines agreements among members

• Pros: Financial strength, Specialisation

• Cons: Unlimited liability, Lack of harmony

Privately Held Companies

• Limited liability company that can’t raise share capital from general public

• Shares are sold to private family/friends

• Board of directors

Publicly Held Companies

• Company that can advertise/sell shares to public via Stock Exchange

• Unprofitable companies can’t distribute dividends

• Share price falls

• Board of directors

Pros & Cons of Companies

• Pros: Limited liability, economics of scale, tax benefits, lower than income tax which is paid by sole proprietors and partnerships

• Cons: Communication issues, disclosure of information, loss of control

SWOT analysis - Analyzes internal and external factors. Addresses what the business is lacking and minimizes risks. Allows one to understand the business’ position

Strengths - What are things your business does well? What separates you from your competitors?

Weaknesses - What does your business lack? What are things your competitors do better?

Opportunities - Is there an increasing need for your product/service?

Threats - Is there an increase in competition?

STEEPLE ANALYSIS

• Internal/External analysis, Mainly external, Encourages proactivity, Improve decision-making, Predict economic growth

• Social: lifestyles, cultural barriers

• Technological: internet availability, technological change

• Economic: inflation rate, unemployment rate

• Environmental: climate change, sustainability

• Political: political stability, international relations

• Legal: copyright, employment laws

• Ethical: confidentiality, business ethics