factors affecting the success/failure of a business

• What are the main financial factors affecting a business's success?

  Revenue, profit, costs, expenses, and cash flow
• How is revenue defined in a business context?

  Revenue is the total income from sales
• What does profit represent in a business?

  Profit is what’s left after all expenses are deducted from revenue
• What might declining revenue indicate for a business?

  It could mean the business is struggling to attract customers or facing competition
• If a coffee shop's revenue drops in summer, what action might it take?

  Introduce seasonal cold beverages
• Why is monitoring costs and expenses essential for a business?

  It helps improve profitability and identify inefficiencies
• What might a restaurant do if its ingredient costs rise sharply?

  Explore alternative suppliers or adjust menu prices
• What does cash flow measure in a business?

  The money coming in versus going out
• Why is positive cash flow important for a business?

  It allows a business to pay its bills, reinvest, and handle emergencies
• What might a retail store do to manage seasonal cash flow dips?

  Plan for these dips to ensure enough cash on hand
• What non-financial factors can impact a business's success?

  Customer satisfaction, employee engagement, and brand reputation
• How does customer satisfaction affect a business?

  It affects repeat business and customer loyalty
• What might a hotel do to improve customer satisfaction?

  Address cleanliness complaints
• Why is employee engagement important for a business?

  Engaged employees are more productive and provide better customer service
• What could a business with low employee engagement implement to improve morale?

  Regular training or incentive programs
• How can brand reputation influence a business?

  A strong reputation can attract new customers, while a damaged reputation can deter them
• What might a tech company with a strong reputation for innovation do?

  Attract tech-savvy customers
• What are short-term factors in business planning?

  Activities that have an immediate impact on sales and operations
• What are long-term factors in business planning?

  Strategic planning for growth, like launching new products or entering new markets
• What is an example of a short-term factor for a clothing store?

  Offering end-of-season discounts
• What is an example of a long-term factor for a clothing store?

  Planning to launch an online store next year
• Why is it important to compare a business's current performance to past results?

  It can reveal growth or decline
• What might indicate positive growth for a café?

  Steady increase in sales over the past two years
• What does a SWOT analysis provide for a business?

  A clear view of a business’s current position by analyzing internal and external factors
• What are the four components of a SWOT analysis?

  Strengths, weaknesses, opportunities, and threats
• How can a business capitalize on its strengths according to a SWOT analysis?

  By leveraging internal elements like strong brand loyalty or unique products
• What should a business do about its weaknesses identified in a SWOT analysis?

  Address internal issues or limitations
• What are opportunities in a SWOT analysis?

  External possibilities for growth, such as market trends or new technology
• What are threats in a SWOT analysis?

  External risks like new competitors or economic downturns
• How might a bookstore use its SWOT analysis?

  Identify strengths like a loyal customer base and weaknesses like a lack of online presence
• What is the key takeaway from a SWOT analysis?

  It helps businesses capitalize on strengths and opportunities while addressing weaknesses and preparing for threats
• Why is it important to look at both financial and non-financial data when assessing a business?

  It provides a comprehensive view of the business's performance
• What does financial analysis involve?

  Using financial statements to understand profitability, liquidity, and overall financial health
• What do profit margins indicate in a business?

  They help a business understand how much it earns relative to sales
• What might a restaurant with low profit margins need to reassess?

  Its pricing strategy or find cost-effective suppliers
• What do liquidity ratios show for a business?

  Whether a business can meet short-term obligations
• What might a retail store with low liquidity struggle with?

  Stocking up for peak seasons
• What does non-financial data include?

  Customer reviews, employee surveys, and market share
• How can high customer satisfaction scores benefit a hotel chain?

  They may lead to steady bookings and positive word-of-mouth advertising
• Why is it important to compare a business's performance with organizational objectives?

  To check if the business is meeting its targets