Business Arithmetic — Entrepreneurship STD 12 Commerce — Question
CBSE BoardEnglish MediumSTD 12 CommerceEntrepreneurshipBusiness Arithmetic5 Marks
Question
Explain the benefits of budgeting. Give some value points.
✓
Answer
For start up entrepreneurs, a budget is like a roadmap that can help them set goals and assess the validity of their business concept.
For established small businesses, a budget can be used to take the pulse of the business, determining how the business is performing through the years, and helping identify possible future investments.
By regularly consulting a budget, business leaders can compare actual figures and catch potential business shortfalls or other problems early. Budgets can also be instrumental in winning over investors, convincing banks your business is a good loan risk, or bringing on new partners or customers.
The single-most potential benefit of formal budgeting lies in ensuring that responsible managers take time each year (and then at fixed intervals throughout the year) in thinking about their operation by looking at all of its aspects. Budgeting creates a comprehensive picture of the future and makes both opportunities and barriers conscious. This foreknowledge then helps guide day-to-day activities.
Value Points: Regularity
Positive performance
Responsibility of managers and Others
Feasibility
Deal with other problems and find solutions to it.
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