Unit 2 P4 Business

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Managing Finance There is profit being made and used all the time in businesses. This also includes the Potted Hen restaurant that Dermot Regan owns. This means that as the manager of Potted Hen, Dermot Regan has to be able to manage all the finance of his restaurant correctly. The reason for this is because if he does not manage his finance properly he may lose profit and use whatever profit that he gains on unsuitable things that the restaurant may not need and fall into debt. Forecasting Forecasting is a planningtool that helps management in the business. It is an attempt to cope with the uncertain things of the future for the business. So the owner of the business must rely mainly on data from the past and present and analyse it to see…show more content…
However, he finds that the only way to make his business successful is by making realistic budgets. This assists with forwarding his plans so they will not overwhelm themselves with an unrealistic budget. Though there may be more than one type of budgeting. But Dermot only uses historic budgeting. This means he uses last year’s figures as the base for the budget. The advantage of this is that it makes his budgets realistic because the budget will be based on actual results. However, the conditions may have changed from last years. For example, they would be serving different dishes, may have different type of customers coming this year. Therefore, as a result he must monitor the budgets each month and make any changes if needed. This will help him see if his targets for the business are being met. However, if his targets are not being met, he must make changes in his business accordingly to the problem. For example, he might have to change the menus regularly, this means that costs will have to be reviewed and prices changed as well. It is important for Dermot to see if there are any differences between what he budgeted for and what he is actually…show more content…
This makes him responsible for the business and because of that, he has to make the financial decisions. In addition, he finds it very important to be able to make the financial decisions. That is because they can affect all areas of his business and can affect the performance of the business so to make sure there are not any mistakes he does it himself. In addition, when he makes a major decision for the business, he does it because he thinks that it will benefit his restaurant more thanks to him. Therefore, he must be careful with whatever decisions he makes. This is why when he is planning to do a major decision he meets his accountant to talk over about his idea. The accountant talks about how much it will cost to make this decision, how long it will take to do this change and what they have to do with the employees to get them ready for the new
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