BBI10pg85-89ar (3).pdf - What Is Business Success BEFORE YO U BEGIN Discuss the following with a partner Should profit be the only motive for running a

BBI10pg85-89ar (3).pdf - What Is Business Success BEFORE YO...

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Roots, Tim Hortons, and Sobeys are all successful Canadian businesses. What does it mean to be successful? For one thing, these businesses are still in operation. A sure sign of an unsuccessful business is the “Going out of Business” sign in the window. But success means more than just staying afloat. Business success is measured in four ways. The most important gauge is profit since a business will fail without it, but to be considered successful a business should also demonstrate social responsibility by making a contribution to its community and society. Since the people who work for the business have their own way of evaluating the suc- cess of the company, successful businesses need to develop employee satisfaction. Finally, a successful business must provide its owner or operator with some degree of personal satisfaction. P ROFIT Most often, describing a business as successful means that it is prof- itable. A successful business makes money; an unsuccessful business does not. An unprofitable business will not continue operating for long. A business makes a profit by selling its goods and services for more than the costs and expenses required to produce them. For example, if you made some tomato sauce from tomatoes you grew in your garden and then sold it in jars to your classmates, you would have to sell the sauce for more than it cost you to make it in order to make a profit. This process is not as simple as it sounds. The tomato plant cost $10 and yielded 30 tomatoes, 25 of which were usable. Therefore, each usable tomato cost 40¢. But you also had to drive to the nursery to purchase the tomato plant. The gas cost $2. The wear and tear on the car cost 50¢. These costs and expenses add an extra 10¢ per tomato, increasing the cost of each tomato to 50¢. Each jar of sauce holds 8 tomatoes, which means that the tomatoes in the sauce cost $4. Other costs and expenses include the jars, the wax for sealing them, and the electricity for the stove to heat the sauce and sterilize the jars. Also take into account the salt, sugar, and spices for the sauce. Consider, too, the household expenses, such as lighting and heating the kitchen for as long as it takes you to make the sauce. To these costs and expenses, add the portion of household insurance and mortgage interest, or the portion of apartment rent, that was used for your time in the kitchen. You must also account for the use of pots, pans, bowls, and knives, the transportation costs to buy the jars and spices, and the 85 Chapter 5 • What Makes a Successful Business? What Is Business Success? B U S I N E S S — F A C T — Microsoft, the world’s largest software maker, made a net profit of $9.4 billion (U.S.) in 2000. B E F O R E YOU B E G I N Discuss the following with a partner: Should profit be the only motive for running a business?
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water that you used for sterilization and cleaning up. And then there’s your time—the time it took you to • buy the plants, jars, wax, and ingredients for the sauce • tend the tomato plant and harvest the tomatoes
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  • Spring '19
  • rohda

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