Tough Dollar Decisions


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Taking step 1



Decision makers

People who make decisions in accounting make them in relation to three categories. Category 1 consists of those who manage a business. Category 2 are the external people who are connected to a business and have a direct financial interest to that business. Category 3 are organizations that have an indirect effect on the business. This applies to NPOs (non-profit organizations) as well. Keep in mind that some small businesses aspire to become big corporate companies, so the structure of those entities are designed to support such growth.

Management refers to the group of people who are in charge of operating a business and therefore are responsible for making sure the business meets profitability and liquidity goals. If a business is extremely large, then management of it will likely require more than one person, as well as a work force hired to perform various functions of the business. Managers need to answer important questions regarding the company’s net income, and whether or not it has a substantial rate of return.

Other important concerns a manager will have to deal with relate to whether or not the business has enough assets, and which products bring in the most money. When making a decision, however, managers usually follow a systematic approach because, even though larger businesses require more comprehensive analyses, they often follow a similar pattern to small businesses as outlined in the following paragraphs.

Business operations

  1. Financing a business – Financing for a business is critical because it needs money with which to continue operations. Here is a popular website that offers additional information about financing a small business. The SBA is a governmental agency that provides information – some of it advisory in nature – to the nations small businesses and, depending on the size and nature of your business, the SBA may be a source of financing for your small business.
  2. Investing in the business – Companies invest in their assets as a means of self-financing and projected earnings if they continue to do well, in which case they stand to gain substantial profits.
  3. Producing goods or services – Operations and production management is responsible for developing and producing goods and services that the company can sell.
  4. Marketing – Business owners and managers learn marketing and advertising skills so they will be able to distribute goods and services more efficiently.
  5. Managing workers – Human resource management requires hiring qualified employees, supervising them and paying them.
  6. Providing information – The information management retrieves data about the company, such as how much it revenue it produced in the last month, and organize the data in a way so that it can be used in the most effective manner. It also releases information to managers and important or connected people outside the business.


Starting a new business need not be as difficult as some folks make it seem. Let’s face it, no business starts out being a big business or big corporation. Most big businesses grew out of small businesses, some of which were started by a single individual in his/her own home (or garage), and through hands-on management and sound financial principles grew, methodically, to become the successful entities they ended up being. So take the first step by making a small investment and stay with it until it becomes the successful business you want it to be.