You Make the Call - Situation 1

question 91

Essay

You Make the Call - Situation 1
In the following statement, a business owner attempts to explain and justify his preference for slow growth in his business.
I limit my growth pace and make every effort to service my present customers in the manner they deserve. I have some peer pressure to do otherwise by following the advice of experts-that is, to take on partners and debt to facilitate rapid growth in sales and market share. When tempted by such thoughts, I think about what I might gain. Perhaps I could make more money, but I would also expect a lot more problems. Also, I think it might interfere somewhat with my family relationships, which are very important to me.

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Definitions:

Machinery

Equipment and devices that perform specific tasks in industries, contributing to production processes.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the financial gain in conducting business activities.

Rate of Return

The increase or decrease in the value of an investment over a set time frame, shown as a percent of the investment's original price.

Assets

Economic resources owned or controlled by an individual, corporation, or country that are expected to provide future benefits, including cash, real estate, and intellectual property.