Entrepreneurs are, by nature, stubborn. The late Dave Thomas, founder of Wendy’s Old Fashioned Hamburgers, often recounted how many of his friends and advisors recommended that he not start Wendy’sbecause the United States already had plenty of fast-food restaurants. Many new businesses fail, and knowing when to get out of a business can be as important as when to keep going. Let’s say that you begin a software design business after graduating from college. Your first year accounting profit is $25,000. Should you continue in the business or should you leave?
No decision can be made simply on the basis of accounting profits.
It is important to find out the economic profit as well.
That is, Economic profit = Accounting profit – Opportunity cost
That is, how much money income is foregone in order to run the business.
In case of negative economic profit, the decision must be changed, and the business can be shut. However, if the economic profits are also positive, the business must be pursued further.
Entrepreneurs are, by nature, stubborn. The late Dave Thomas, founder of Wendy’s Old Fashioned Hamburgers, often...
Company Case In-N-Out Burger: Customer Value the Old-Fashioned Way In 1948, Harry and Esther Snyder opened the first In-N-Out Burger in Baldwin Park, California. It was a simple double drive-thru setup with the kitchen between two service lanes, a walk-up window, and outdoor seating. The menu consisted of burgers, shakes, soft drinks, and fries. This format was common for the time period. In fact, another burger joint that fit this same description opened up the very same year just 45...
Please read the article and answer about questions. You and the Law Business and law are inseparable. For B-Money, the two predictably merged when he was negotiat- ing a deal for his tracks. At other times, the merger is unpredictable, like when your business faces an unexpected auto accident, product recall, or government regulation change. In either type of situation, when business owners know the law, they can better protect themselves and sometimes even avoid the problems completely. This chapter...