Questions and Answers
What is one of the key factors a businessman must analyze before starting a new project?
Consumer preferences
Why is it important to assess risks before starting a new business project?
To avoid potential obstacles to success
Which type of risk is related to uncertainties that cannot be covered by insurance?
Uninsurable risk
What is one of the significant risks mentioned in the text?
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What is described as the 'Life Blood' of business in the text?
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What is a key factor that largely influences the success of a business according to the text?
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In the context of business, what is the main objective of all enterprises as mentioned in the text?
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What are the two main aims mentioned for an enterprise in the text?
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What areas are mentioned as needing planning before starting a business in the text?
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What is highlighted as becoming more complex in a large business according to the text?
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Which phrase captures the essence of the modern business world according to the text?
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Study Notes
Prospect, Risks, and Uncertainty
- Before starting a new project, a businessman must analyze business opportunities in terms of expected profits, possibility of success, and nature of demand.
- Assessment of business opportunities helps satisfy the demands of owners, management, employees, consumers, and the government.
- Risks and uncertainties in business may spoil the chances of success in the future, so they must be calculated and studied carefully.
- There are two types of risks: insurable risks and uninsurable risks.
Capital
- Capital is the "Life Blood" of business and is required for starting and continuing a business.
- Finance is concerned with providing the necessary capital for various purposes, including investment in fixed assets like land, building, machinery, and equipment.
- Successful results in business depend largely on the ability of entrepreneurs to anticipate and solve problems with minimum cost.
Starting a Business
- Planning is essential before starting a business, and entrepreneurs must anticipate and solve problems like location, equipment, shop layout, purchasing, and financing needs.
- These problems become more complex in a big business.
Basic Motive of Business
- The basic motive of all business concerns is to earn profits through the exchange of goods and services for mutual benefits.
- The two aims of an enterprise are to maximize profits and minimize costs and expenses.
- Production, marketing, and sales activities are guided by the attainment of the basic motive of income over expenditure.
Important Factors to Consider
- A person should consider the following factors before starting a business: Prospect, Risks, and Uncertainty, Capital/Finance, Location, Organization and Management, Government Laws and Policies, Marketing, Labour, and Business Information.
