Question

" Profits are essential in business". Explain giving two reasons.​

Answer 1

Explanation:

The success of a small business depends on its ability to continually earn profits. Profit equals a company’s revenues minus expenses. Earning a profit is important to a small business because profitability impacts whether a company can secure financing from a bank, attract investors to fund its operations and grow its business. Companies cannot remain in business without turning a profit.

A business owner must understand the importance of profitability in business management and develop strategies that give the company the best chance at remaining profitable.