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Member You - Market Failures And Business Cycles (Part 1)
Starting a restaurant business is more than just having a good recipe. This is a long process that requires a lot of planning and organizing in order to make its launching a success. After looking into the location, business structure, target market, and funds, other expenses should also be considered. One of which is the restaurant equipment and supplies.Restaurant equipment and supplies are one of the biggest expenses that you will incur during start up. Not only that, restaurant equipment and supplies selection is also a complex process since different kinds of restaurants require different things. The best place to begin your search is to visit food service equipment dealers. However, since many food equipment dealers now take advantage of the Internet, you can start by going online and check online equipment dealers that offer quality and affordable restaurant equipment and supplies.Basically, some of the restaurant equipment that you will need includes bakery equipment, bar equipment, refrigeration, ice machines, steam equipment, coffee and tea equipment, service kitchen, ventilation equipment, dishwashers, and dining area equipment. You needs will depend on the kind of restaurant that you will open and on the budget that you have.Aside from rest
Some people enjoy writing. Some, like me, are even driven to write. Others hate it. They hate words. They hate writing them down, and they hate typing them. Some people even hate reading them. Regardless, the written word is a necessary part of our daily lives, particularly in a world that has become less face-to-face and more virtual. We communicate not only through the Web but through our e-mail communications, instant messengers and online chat. As a result, the words and images we use must be carefully chosen to not only convey our meaning but our tone as well.Here are some tips to help you put your best foot forward in your online communications:• “Internet speak” (LOL, b4, np, ty, etc.) is fine for casual communications with friends, but it should not be used on your company Web site or in any other professional communications. Words should not have to be deciphered to be understood.• Always use appropriate punctuation and grammar – these tried and true rules will never go out of style. Need a refresher course? Pick up a resource guide the next time you visit Amazon.com or your local bookstore. I like Punctuation Simplified and Applied by Geraldine Woods (Webster’s New World, 2006).• For those who didn’t get the memo yet, PLEASE don’t use
The income that we earn is normally divided into two portions, Consumption and Savings. We normally consume a large portion of the income we earn for our day to day necessities as well as irregular buys. Regular necessities include food, clothing, toothpastes, soaps and other daily necessities. Irregular buys include bikes, cars, books, movies, music and so on. After we spend most of our incomes on Consumption, we save a small portion of our income and invest it in shares, bonds, fixed deposits and other long term investments.
In direct relation to our above mentioned activity, our economy is divided into two sectors – Consumption sector and Investment sector. If we exclude the government spending, Consumption sector constitutes roughly around 80% of the size of economy. It includes everything that we buy – food, clothing, cars, bikes, TVs and other durable goods, books – every thing. And around 20 percent of the size our economy is constituted by the Investment sector. Investment sector mainly includes activities such as installing new plants and capacities, and housing. A three sector model would also include government spending as well. However free markets have more to do with these sectors and less to do with Government Spending, so let us exclude governemnt spending. The figures given above are only approximate and can vary sizeably from economy to economy.
So how are profits made by the Consumption sector manufacturers? In any economy, Consumption sector always produces in excess of its requirements – it produces surplus. Consumption sector capitalists as well as households also save a certain portion of their income. Investors invest these Savings in the Investment sector. So these Savings turn into the earnings of the Investment sector capitalists and workers. The workers and capitalists of the Investment sector then spend their earnings on the consumption goods. So basically the surplus production of the Consumption sector is consumed by the workers and capitalists of the Investment sector. Therefore in a circular flow monetary economy, the income of th
Capital is normally required for three possible applications, namely:1. Fixed Capital:Fixed capital refers to your business needs to buy fixed assets. This means that you need the capital to buy things like buildings, machines, computers, vehicles and furniture. These items are normally purchased for use in the business and not for resale. The purpose is to generate sales. They do not have a resale value and can be liquidated again, but in most instances lose value over time. This is called depreciation. Depreciation is seen as an expense and is recorded in the income statement. Land is the only item that does not depreciate. Fixed assets on the other hand are recorded in the balance sheet. When planning your business you must determine how much you will need for fixed assets. This capital will then be fixed and will not be available to for something else. Note that there is generally a cost linked in obtaining such capital. This will limit the amount that you can justify. careful planning of your fixed asset requirements is therefore necessary.2. Working Capital:Apart from buying assets for your business, you will need cash to run your business. Capital that will work for you and generate a profit. Working capi
The income that we earn is normally divided into two portions, Consumption and Savings. We normally consume a large portion of the income we earn for our day to day necessities as well as irregular buys. Regular necessities include food, clothing, toothpastes, soaps and other daily necessities. Irregular buys include bikes, cars, books, movies, music and so on. After we spend most of our incomes on Consumption, we save a small portion of our income and invest it in shares, bonds, fixed deposits and other long term investments.
In direct relation to our above mentioned activity, our economy is divided into two sectors – Consumption sector and Investment sector. If we exclude the government spending, Consumption sector constitutes roughly around 80% of the size of economy. It includes everything that we buy – food, clothing, cars, bikes, TVs and other durable goods, books – every thing. And around 20 percent of the size our economy is constituted by the Investment sector. Investment sector mainly includes activities such as installing new plants and capacities, and housing. A three sector model would also include government spending as well. However free markets have more to do with these sectors and less to do with Government Spending, so let us exclude governemnt spending. The figures given above are only approximate and can vary sizeably from economy to economy.
So how are profits made by the Consumption sector manufacturers? In any economy, Consumption sector always produces in excess of its requirements – it produces surplus. Consumption sector capitalists as well as households also save a certain portion of their income. Investors invest these Savings in the Investment sector. So these Savings turn into the earnings of the Investment sector capitalists and workers. The workers and capitalists of the Investment sector then spend their earnings on the consumption goods. So basically the surplus production of the Consumption sector is consumed by the workers and capitalists of the Investment sector. Therefore in a circular flow monetary economy, the income of t
Once a decision had been made to incorporate, the next question will inevitably be where to incorporate. One of the more attractive options available is to set up a Nevada corporation.There are many advantages to forming a Nevada corporation, but before exploring these, it may be advisable to understand from the outset what incorporating in Nevada will not do for you.Incorporating in Nevada will not lower costsYou must have heard the statement quite often that organizing a Nevada corporation will result in lower costs. The truth of the matter is that it won’t and that incorporating in your home state may well end up being cheaper. The primary reason is that Nevada imposes a number of fees on corporations domiciled in that state. Fees that many home states do not charge.Incorporating in Nevada will not lower taxesThere is also a misperception that if you register as a Nevada corporation, you will lower your taxes. Whilst Nevada has no corporate income tax, you still need to file corporate tax returns in those states where you operate as a non-resident. Things sort of cancel out, and in the end you don’t really save. This myth of lower taxes is widespread, probably encouraged by incorporation service providers. These providers play on the e
In direct relation to our above mentioned activity, our economy is divided into two sectors – Consumption sector and Investment sector. If we exclude the government spending, Consumption sector constitutes roughly around 80% of the size of economy. It includes everything that we buy – food, clothing, cars, bikes, TVs and other durable goods, books – every thing. And around 20 percent of the size our economy is constituted by the Investment sector. Investment sector mainly includes activities such as installing new plants and capacities, and housing. A three sector model would also include government spending as well. However free markets have more to do with these sectors and less to do with Government Spending, so let us exclude governemnt spending. The figures given above are only approximate and can vary sizeably from economy to economy.
So how are profits made by the Consumption sector manufacturers? In any economy, Consumption sector always produces in excess of its requirements – it produces surplus. Consumption sector capitalists as well as households also save a certain portion of their income. Investors invest these Savings in the Investment sector. So these Savings turn into the earnings of the Investment sector capitalists and workers. The workers and capitalists of the Investment sector then spend their earnings on the consumption goods. So basically the surplus production of the Consumption sector is consumed by the workers and capitalists of the Investment sector. Therefore in a circular flow monetary economy, the income of t
As your cleaning company grows and your client list expands, you'll soon realize that you can't do it all yourself. Hiring, supervising and taking care of payroll are very time-consuming measures. Rather than putting an employee on the payroll, some companies elect to use independent contractors. But if you improperly classify a worker as an independent contractor when the IRS views them as an employee you could be liable for back taxes, penalties and interest!Putting employees on the payroll means that you are responsible for withholding income taxes, social security taxes, Medicare, and unemployment taxes. A business can get around all of this by hiring "independent contractors" instead of putting employees on the payroll. The independent contractor is then responsible to pay his or her own taxes and insurance. But the IRS has strict guidelines that determine if they are truly an independent contractor or if they are actually an employee.Who is an independent contractor? If you, as the employer, only have the right to decide the result of the work being done, and not how that result is achieved, then the individual is most likely an independent contractor. However, if you as the employer control not only the end result, but also how that result is achieved
So how are profits made by the Consumption sector manufacturers? In any economy, Consumption sector always produces in excess of its requirements – it produces surplus. Consumption sector capitalists as well as households also save a certain portion of their income. Investors invest these Savings in the Investment sector. So these Savings turn into the earnings of the Investment sector capitalists and workers. The workers and capitalists of the Investment sector then spend their earnings on the consumption goods. So basically the surplus production of the Consumption sector is consumed by the workers and capitalists of the Investment sector. Therefore in a circular flow monetary economy, the income of t
Here is a secret that may be difficult for you to believe, so prepare yourself. It is an extremely important secret that can have a most profound impact on your small business success, or it's failure.Let's start by asking a simple question...Do you enjoy sales?The truth of the matter is that when many small business owners are asked this question, they respond with answers like, "No way" or "I can't stand sales, let someone else do it."Why is your answer to the above question so important? No doubt you have seen headlines like the following, which glorify how easy and simple it is to succeed in business:"The Ultimate Lazy Way To Start Your Own Business""Cash In On A Multi-Billion Dollar Industry In Your Underwear""Easily Generate A Lucrative Income While Sleeping"We are constantly being bombarded with these "easy ways" to make a million bucks. Does success in business actually work this way? Not in reality! Is it realistic? Not even close!The bottom line in operating a successful long-term business comes down to your ability to sell your product...period. It doesn't get any simpler than that. You can either sell your own product or resell somebody's else's product. Either way, your success or failure will ultimately
So there are two things that we have to note here. First the size of the investment sector decides on the size of the profits of the Consumption sector. If there are huge Investments made, the Consumption sector capitalists make huge surpluses or profits and if the size of the Investment sector is on the lower side, the Consumption sector capitalists would make lower surpluses or profits. Also all of the Savings made should always be invested. If Savings are made but are not invested, then it would lead to a lower size of Investments and lower profits. Insufficient profits would force the producers to cut down on their production levels and this would directly lead to rising unemployment and recession! It is a long recognized economic thought that Savings made should be compulsorily invested fully so that the economy can be in equilibrium. If the Savings made are not invested fully, it can lead to disequilibrium between Supply and Demand and can lead to piling up of unsold stocks of inventories and a subsequent recession.
With the above short introduction to the structure of our economy, we are ready for a small journey into the fascinating world of Business Cycles.
Our economies are rarely ever static. They keep growing in size every year. Now in a growing economy Consumption also grows. Year on year more cars are purchased, more televisions are bought, more computers are installed and so on. It is natural that when Consumption grows by say 6%, the suppliers would expect their surplus also to grow by 6% because surplus, which is called profit in the business parlance, is obviously measured in percentage terms. However the surplus production has to be consumed by the workers of the Investment sector which obviously means that even Investment would have to grow by 6%. However this would mean that Savings, which is the fund for Investment, would also have to grow by 6%. What would happen if Consumption grows by 6% but Investment or Savings do not grow by an equivalent percentage? To the extent of the inequality, producers’ surplus would remain unsold and the economy would be in disequilibrium. So the equilibrium condition of the economy would be –
Periodic Growth
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