In: Finance
Q4) Why is it important to establish a time limit for a new business to generate a profit?
It's quite simple if we correlate the business without life's as life always takes time to understand everything including parents, relationship, surrounding within us to make as more knowledgeable for everything.
Similarly, the business has a four stages where childhood means Introduction stage which always takes time to be on feet, similarly in business also introduction stage is that phase which always takes time of quarter, six months, or sometimes a year, to have a rotation of a business transaction, financial transaction and for the profit, a year is not enough but this will start to a business entity and the actual time period where a business can perform better is three years from the introduction or expansion stage, where a business entered into a market and has have created a well relation with the buyers and sellers.
This is the first stage the other stages are peak, contraction, and through.
The correlation of life will work, as the expansion stage is our childhood, peak stage is our young age, contraction is our matured age where we are neither young nor old and the last stage of through where a person is become old and need a support of something, that can be anything be a son, grandson and in business it may be a new product, or increased flow of money to have the expansion again....!!!! Hope life will get understood... :-)