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Understanding the Concepts

In: Business and Management

Submitted By wgould
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Pages 8
Understanding the Concepts
William Gould
Finance 100
Dr. Crawford
March 7, 2013
Strayer University, Augusta Campus

Owning and operating your own business is a goal of most Americans. The thing about owning your own business is to understand the concepts of operating a small business. When thinking about starting a small business, a person must have a well written business plan. A business plan is an “a formal document that describes a business concept, outlines core business objectives, and details strategies and timelines for achieving those objectives” (Kelly & McGowan, 2012).A business plan consist of marketing: products and services offered, demand from customs, market and location, advertising and marketing plan and pricing strategy, Financial Management: amount needed to start, expected cash flow, projected income and balance sheet, etc...Operation: daily management, hiring and personnel policies, insurance coverage and leasing agreement (Gordick, 2003). Within a small business, a small business owner must be able to keep track of the money that is coming in and going out. Using the different financial source and equation to operate your business is essential in owning and operating a small business. Understanding the concepts will help you own, operates and sustain a small business. NPV and payback is a concept a small business owner must understand, when making decision in a small business. NPV or net present value method is a dynamic investment appraisal and a discounted cash flow method (Rudolf, 2002). “The basis for the net present value method is the assumption that one euro today is worth more than one euro will be worth tomorrow” (Rudolf, 2002). In a small or any business the owner want the capital in more than the capital going out in a business. The net present value method can assessed those profits by examining the return on…...

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