There are many different fields in the business world. Business Management is the largest field in the corporate world. It takes responsibility, skill and determination to form a successful business of any type. There are numerous areas within a business that need the skills of management. Control of expenses, payroll, time management, and to initially raise capital to start a business all are areas in which management has to play an important role. Any businesses main objective is to gain a profit. A profit is the amount of money a business earns after all of it debts are paid. The field of management is essential to organize the business in such a way that a profit is made.
The business start up is the most important piece of a long puzzle to establish a successful business. An entrepreneur is an individual or group of individuals who desire to open their own business. An entrepreneur needs to gain “smart” money to start his business. “Smart” money is simply capital, and a business needs a lot of it to survive. Today one in ten businesses survive for more than a year. It is hard to start up a successful business today and even harder to maintain a successful business status. An entrepreneur will raise capital through numerous ways. He can look for investors that wish to gain a small silent partnership in the business, loans can be taken from a bank and one of the most common types of capital comes from the stock market. A business owner will take his company public on the stock exchange in order to raise money. While money is being raised, the owner has to determine a ballpark figure on how much he will need to run this business. Today it is said you should have sufficient capital to be able to support your business for two years without returning a profit. After the initial start up is complete then skill and determination is needed to keep the business going.
Cost is the area within a business where profit is made. Cost is the amount of money, which is spent to produce the tangible and or intangible goods or services of your business. These costs affect the price of the product and or service that you are selling. One type of cost is called fixed cost. This type of cost is the expense of a business that does not change and are always constant in a business. When money is made, debts are the first initiative to be paid off. Fixed costs include rent, wages to employees, and equipment needed to produce you good and or service. In for example a Flower shop, the fixed costs would be the rent on the building, the payment of the delivery vans, and employee salaries. The other type of costs is called variable cost. This type of cost is one that is ever changing. Again in a Flower shop the variable costs would be a dozen roses. One week a dozen roses may cost the flower shop five dollars to buy them and then they sell them for forty-five dollars. Then the next week the price of the roses my rise by five dollars now costing the flower shop ten so in order for the florist to make the same amount of money as last week he needs to increase his price to the consumer with the increase on price he is paying. The basic main idea of cost is to keep it as low as possible to gain the highest profits.
Determining the profit of a business is another major part of management. Profit is the total income that you receive after paying all of your debts. All debts include for example rent, wages, and interest. A general formula to calculate profit is P = R – C. This says when total revenue is subtracted from costs or debts you will get you profit earnings. Management is needed to make sure that allocating the necessary resources to in the end cover all of the debts and return a profit makes enough revenue.
Salaries are based upon an employee’s age, skill, knowledge of the business and experience in the profession. Payroll is the wages an employee receives for his or her work. Employees are often paid weekly, bi-weekly, or monthly. Full time positions normally consist of thirty-five to forty hours. Usually anything under forty hours a week is considered to be a part time position. Any excess time worked by an employee over their original forty hours a week is considered to be overtime. For this period of time workers are usually paid time and a half, which means they get paid their normal salary plus half of that salary for every hour they work. There are many factors, which affect the payroll of an employee. Many things are taken out of a workers check. These things include Social Security, Disability, Medicare, and State and Federal taxes. These factors can cause a fluctuation in the employees check each week. With today’s modern banking systems, a workers check can be automatically deposited into their checking account without any handling of currency.
As we all know money equals time. While managing a business, the manager needs to stay on top of this area and pay close attention to make sure that all employees are working the correct amount of time to make the most profit for the business. Time is equal to money because there are only a certain amount of hours in each business day for a business to produce all of its revenue. When time is wasted, the amount of gross income can be greatly reduced. One way this can be explained is through the employee waste of time. An example of this would be ten employees taking an additional ten minutes each at lunch, which equals one hour and forty minutes per day. Based on a five-day week of work, this equals to a total loss of eight hours and twenty minutes. If the average employee was estimated to produce a hundred and twenty dollars per hour, that would equal to a total loss of more than fifty thousand dollars for the year. This proves that what employees believe is just a few extra minutes can in turn dramatically change a businesses net profit from one extreme to the other.
Business Management is a very dedicated and appreciated job position. The manager needs to have all eyes open and make sure that the business is running smoothly so that there are no defects in the way the business is being run which could eventually lead to a decrease in the amount of profit in which that business is making each year.