A profit profitable business is a business with manageable risks and sufficient profits or returns which give reasonable returns to the investors. The profits must be supported by sufficient cash flows to run the business. The business you chose must be that one which gives you maximum life satisfaction.
Profits and return
This is a business whose gross income that is the value of total sales is more than the total expenses of the business. The excess of gross income over the total expenses of the business is known as profit.
Profitably of the business also depends on the profit margin for every dollar of income. The profit margin is a percentage of total profit over total gross revenue. The higher the percentage in a given sector the better the business.
Managing business risks
Running a business involves managing different type of risks that face your particular business. You cannot therefore survive in business unless you know how to manage your business risks. Business risks are things which can go wrong if they are not properly managed. You can manage your business risks using a risk management framework as indicated below;
Return to the investors
People engage in business to make profit and get a decent return on their investment. The return you get on your investment depends on the sector and the risks involved. It is the return on the investment which attracts capital and other resources to the business.
