Operations, finance and influences on business

To compete with rival businesses, production costs must be kept low so that products can be priced competitively. The ability to do this is affected by the production processes and technology used.

Quality is essential to a business’ success. Customers must be happy with the products and services they receive. If they are not, a business is unlikely to gain a good reputation or repeat customers.

Often, customers value good customer service above many other factors when making purchases. Offering good customer service can help a business stand out, but they must comply with consumer law.

Business owners have to consider a number of things when choosing a location for their business. These include what type of business and how close they need to be to their customers, labour, materials and competitors.

Businesses must manage their materials effectively. They have a choice between keeping additional stock or using just-in-time stock control. They are affected by the relationship with their suppliers.

Larger businesses have functional areas with specific roles. The finance function manages a business’ finances and helps with decision-making. This allows businesses to manage in the modern world.

Businesses need to consider how to fund their activities when they are starting up and during their day-to-day operations. Various costs need to be covered, such as equipment, stock and paying bills.

Businesses need to consider how to fund their activities when they are starting up and during their day-to-day operations. Various costs need to be covered, such as equipment, stock and paying bills.

Break-even is the point at which a business is not making a profit or a loss. Businesses will calculate their break-even point in order to use the information when making decisions.

The management of cash and cash flow is important as it can prevent a business from failing. Cash flow is the way that money moves in and out of a business and its bank accounts.

Businesses operate in global markets and are judged on the contribution they make to society. Behaving ethically, without harming the environment, and within economic constraints plays an important role regardless of impact on profits.

To operate effectively, all parts of a business must work together. Marketing, operations, finance and human resources areas must be aware of the decisions being made by each other and the impact that these decisions might have.