Sunday, January 25, 2015

How does a business earn a profit?

How does a business earn a profit?
By selling the products more dearly than the costs were. You invest money, pay wages, provide good working conditions, buy the row material, heat, use electricity, pay taxe, etc = these are your costs (roughly). You try to produce more goods in less time, also try to buy the material as cheaply as possible, (nevertheless, you have to pay attention to the quality of the product, othervise you will lose a lot in the market) so that you can keep the costs low. If you are successful, that is the difference between your income and the costs is positive and big, it means you gained a decent profit.

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