what is the role of profit in business

The story that business people are bad and what they do is morally questionable is false. For every Enron, there are 10,000 good companies. We need you to answer this question! already exists. is done on EduRev Study Group by Class 11 Students. What is the role of profit? You may think that business is all about profit, business people are unethical and business in general is a black art of guile and greed. Q.7:- What is the role of profit in business? A modern form of profit corporations exists in the form of B-Corporations. However, in order for a business to become self-sustaining and capable of attracting investment, it … Profit provides resources required to achieve the corporate objectives. A business does not have to make a profit if the business owner does not mind operating the business with funds from other sources and losing money on it over the course of time. Would you like to merge this question into it? Denies the role of risk in profit. Business is the wealth- creating institution of society. Business is the engine of an economy. 10 Most Common Business Models to Make a Profit One of the most critical elements of any sustainable business is achieving a positive cash-flow. Profit is essential in business due to following reasons (i) Profit is the chief motivational factor in business. I thought you would be interested in what I had to say. Every business operates in order to earn profit. Profit is a reward for risk-taken in the business. This discussion on Explain Role of profit in the business.? Company size, industry, product/service complexity, and budget all play a critical role in determining the perfect marketing mix for your organization. The expectation of earning higher profits of business organizations induces them to invest money in new ventures. In any market economy, business plays a huge role. B-corporations. Answer:-Every business operates with an aim to earn more than what has been invested and profit is the excess of revenue over cost. Definition of profit: The surplus remaining after total costs are deducted from total revenue, and the basis on which tax is computed and dividend is paid. already exists … What is the role of profit in business? Strong nonprofit organizations have executive directors who understand the broad role and perform it well. As business is a continuing entity it must grow and expand for its sustainability and profit allows the firm to reinvest in new and emerging business opportunities. The executive director of a nonprofit has numerous duties, the most important of which is carrying out the mission of the organization. It is the best known measure of success in an enterprise. If you know the answer to this question, please register to join our limited beta program and start the conversation right now! A stakeholder may also have made an investment in the business, which also causes her to have an interest in the business's success or failure. Another major factor to consider is if you are in the for-profit or nonprofit business. A business may have other goals but if they do not make profit then they will have to end the business.