Answer to Question #196591 in Management for micheal

Question

v) Explain fully three non-financial issues associated with limiting factors/scarce resources.

Answer 1

1.      Growth potential for products, customers, and markets - Potential buyers or investors would like to identify a clear growth strategy in the business plan, involving potentially even products and markets. A company will not have much value if it is not making any money.

2.      Diversified human capital risk – A company can be equally detrimental if it depends on any one employee, supplier, or customer. One should diversify their dependency among a group of suppliers.

3.      Management risk – A business should not come to a standstill without the owner’s involvement. When an owner invests in a strong management team, it directly affects the health of the business.