When a business manages its costs effectively then it would improve the success and performance of the business. If a business rents a suitable premises and affordable rent then the benefit would be that it would help the business as they are controlling its cost. Another benefit would be that the business is saving money and that money will be used elsewhere. Another benefit is that the business will not be wasting space in their store. So, therefore it would improve the performance and success of the business.
When a business manages to control its budgets then it would be able to reach its objectives and targets which the business has set to achieve. This because the cost of the business have been controlled regularly the business wouldn’t have over spent. Also the business wouldn’t go over budget. So, therefore it would improve the performance and success of the business overall. Another benefit would be that the business would be able to monitor and control the performance of the business against the budget which has been approved.
Furthermore another advantage would be that it would help the business create motivation among the teams by having a plan this will help the company improves its overall performance. So, therefore it would improve the performance and success of the business overall. Another advantage would be that the business would be able manage to assess and evaluate its finances.
However, if a business doesn’t manage to control it cost and budgets properly then the business would purchase huge amounts of stock and doesn’t know whether or when it would sell the stock which it had bought. Then this means that the business has tied up its money in stock and that is would be a drawback for the business because the business wouldn’t have money to spend in other areas of the business such as paying overheads and expenses so the business would have to borrow some money and pay interest in that money. Another disadvantage is that if the business doesn’t the stock in the specific period the stock could become out of date or out o fashion. So the business has to sell those products cheaper then this would mean that they might make less profit on those products or even a loss in some cases. Another disadvantage is that the business would be wasting space in the stock room. Therefore this is would affect the performance of the business as it would reduce its sales revenue and profits.
On the other hand, if a business employs too many workers which it doesn’t require then the business would have tied up its money in labour and that is a drawback for the business because the business wouldn’t have money to spend in other areas of the business. Another disadvantage would be that the business would have less productive workers. Therefore, this is would affect the performance of the business as it would reduce its profits.
Then again, if a business lease a premises that is too expensive then the disadvantage would be that the business would have tied up its money in rent and that is a drawback for the business because the business wouldn’t have money to spend in other areas. Another disadvantage would be that the business would be wasting their money this would reduce the profits which they make at the end of the year. So, this would affect the performance of the business as it would reduce its profits.
However, if a business doesn’t manage to control its budgets then it wouldn’t be able to reach it objectives and targets because the budgets haven’t been observed by the business. So as a result it would be hard to find the cause of the problem. So this means it would be difficult to implement any changes if the performance is not being monitored. Another disadvantage would be that the business would be going over the budget and this would affect the performance of the business. Another disadvantage would be that the business would find it difficult to assess and evaluate its finances then it wouldn’t have a sense of direction and knowing whether it is doing good or bad. Furthermore another disadvantage would be that the business would find it challenging to create motivation among the teams due to the lack of obvious aims. So as a result it would be hard to know the performance of the business as a whole.
I can conclude after evaluating the advantages and disadvantages of managing physical and technological resources and cost and budget I can say that it is in the best interest of a business to manage it’s physical and technological resources as it will improve the overall performance of the business. In addition to that the business will gain the complete advantage of the resources. Furthermore the business will reduce cost and the resources will last longer for the business. It is in the utmost advantage of a business to manage it cost and budget. For a business who manages it costs and budgets will receive huge benefits. The business will increase its income and reduce it expenses. So therefore this will improve the overall performance of the business. In addition to that the business shareholders would receive high dividends at the end of the trading year for the business. This will then encourage the shareholders to invest money in the business which would the business grow and improve the success of the business.