Business question Essay Example | Topics and Well Written Essays - 500 words

Business question - Essay Example It is a time as such when profits are used to meet such unfavorable difficulties in business. Profits have the effect of increasing business volume-profit retention is generally the internal source of capital. This can be utilized for increasing business volumes through diversification and expansion. Thus the portion of profits business is ploughed back for future and further development. The following people could be interested in profits for the business; shareholders need more profits since they expect higher returns in form of dividend. Employees too are entitled to profits in terms of bonuses and increased pay perks, since they contributed to the same. 2. A government regulates businesses for public welfare and safety so as to avoid malpractices by greedy investors. The second reason is so as to protect the industry and ensure security and protection of those who operate their business correctly. Regulation will ensure there are proper inspections by the government to weed out criminal or undesirable practices, licensing and proper permits. Third reason for regulation is revenue generation-businesses pay for licenses and certificates so as to operate. This creates revenue for the government. The advantages for regulation include protection of the society from unscrupulous business people who could harm citizens. It also ensures there is healthy competition leading to lower prices for goods and services. Regulation is disadvantageous because consumers could be charged more for commodities and services due to taxation and increased cost of doing business. 3. A business should be as efficient as possible so as to reduce wastages and maximize its profits. An efficient business uses fewer inputs and produces more outputs, thus increasing its profits and value to the shareholders and also its competitiveness in the market. The