What Are The Importance Of Profit In A Business?

Question

What Are The Importance Of Profit In A Business?

5 Answers

Answer Question

Answer 1

The importance of profit in a business is so they know exaclty what they can spend that money on to make that business prosper and make sure that they can develop their merchandise and services to make them better to attract more customer's to that business. Profits help a business spend money wisely and so they can buy in equipment which will make them perform better in their job role and so the business can run more effectively and effeciently.

Answer 2

If you do not make a profit you will not have money to reinvest to improve the business and you stand the chance of owing so much money that in the end the business cannot pay its debts and has to close.

Answer 3

To what extent do you agree with the popular notion that profits is the major motivation of going into business and remaining in business

Answer 4

It basically determines whether a business lives or dies and if it expands/grows or doesnt

Answer 5

I would disagree with the first answer stating that 'profit is the main aim of a business organisation'. Generating a profit is a necessary part of a business. Without it you are effectively asking somebody else (the shareholders, the bank) to subsidise the business's activities. With profit, the business has choices about what it does and what or who it invests in. Profit is the reward that the founders or later shareholders get for pursuing their business ideas.

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