2007-08-11 09:39:50 · 4 answers · asked by DeAquanita L 1 in Business & Finance ➔ Other - Business & Finance
Small businesses especially if new must be flexible and chop and change until they have a successful business model. All businesses large and small must strive to limit their exposure to fixed costs.
2007-08-11 09:47:59 · answer #1 · answered by georgebonbon 4 · 0⤊ 0⤋
To survive the bad times and respond to market changes.
An example is a travel agency in the 80s when most were going to computer systems that cost 25K or more. One I did the accounting for didn't buy the computer system and when the travel industry was down she could lay off a person and still make a profit. Others were going out of business because they couldn't pay the payments on the computers.
The same thing happened to many small farmers, they buy expensive equipment and have a drought or freeze and can't make the payments so lose the farm.
2007-08-11 10:00:22 · answer #2 · answered by shipwreck 7 · 0⤊ 0⤋
It provides contingency against periods of underperformance in sales.
2007-08-11 09:46:30 · answer #3 · answered by Anonymous · 0⤊ 0⤋
no idea
2007-08-11 09:49:22 · answer #4 · answered by roaringlion74 3 · 0⤊ 0⤋