Business Objective

A company entering the market with a goal to do business shall have the following objectives:

Maximizing the returns on stockholders capital (wealth maximization) & and;
Profit Maximization

Unlike traditional business theories where maximum importance was given to profit maximization, modern theories lays down facts stressing on the maximization of wealth of its stock holders. Which means, maximizing the price of the stock/shares.

Profit maximization is a short term goal mainly for a period of one year or less. A company can maximize its short term profits at the expense of its long term wealth maximization. Stock holders wealth maximization is along term goal as stockholders are investing in a company expecting good-future-returns. Wealth maximization is preferable because it considers (1) wealth for long term, (2) risks, (3) stockholders returns and timing of the returns. Timing of the returns is important, as earlier the return is received, the better. A quick-positive return reduces the risk involved in the investment due to time factor. Also, if you have quick cash in hand you can reinvest the same.

When we are discussing long and short term business objectives, we must keep in mind that very often profit maximization and wealth maximization are conflicting objectives. It is very important for an entrepreneur to decide that what is his priority, longer term business or short term business. Very often you will find business starting off very well but ultimately going down to competition. They never invest in modernization and expansion of their business process. Hence better companies with good technology took over it. A costly investment may create losses in short term but yield substantial profits in long run. A company who wants to show short term profits may continuously postpone its capital repairs or equipment replacement. These postponements will certainly hurt the long term profitability. As an investor, important is to analyze a companies business objective and find out if it is focusing more on short term and long term growth.

The biggest obstacle in the way of long term wealth maximization is our thought process. And if you have overcome your mind then the second obstacle you will face is Financial Risk linked with any investment. Risk refers to the variability of expected returns (sales, earnings etc) and its profitability. Hence risk analysis is very important. Risk analysis is a process if measuring and analyzing the risk associated with financial and investment decisions. It is important to consider risk in making capital investment decisions because of the large amount of capital involved and also because of long term nature of the investment (time factor). Compare rate of return with amount of risk involved. Investor agreeing to take risk must be rewarded with good returns and vise versa. Management of Risk and returns is a key to create a long term wealth Maximization.

Sm Organizational Behaviour VI [VHS]

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Developing a Plan For Your Home Business Blog

A home business blog can earn you a very good income provided you have taken the time to develop an effective strategy for marketing your business. The blogging business can be very demanding therefore it is essential that you establish your business objectives and marketing strategy early on.

The planning process when creating a blog for income earning purposes is extremely important and can be broken down into 5 simple steps. Let's have a look at the 5 steps you will need to take when planning your money making blog.

Determine Your Objectives

Here is where you 'get the ball rolling' and decide what it is you want to blog about and how you intend to get paid for your efforts. These are two HUGE decisions that could be the basis for several articles alone and should not be taken lightly. You must be sure that whatever you choose to blog about is something that will maintain your interest and enthusiasm while also being something people are willing to pay for.

You will also have several choices as to how you will want to set up your blogging business in order to be compensated for your efforts. You can promote affiliate products, create your own products and/or use AdSense on your site. You can even introduce a combination of any of these strategies. The list grows as to your selection possibilities and seems to be limited anymore only by your own imagination.

Reality Check

After you have established your objectives you will need to take an honest look at your decisions. You must determine if you have got the resources of time, skill, resolve and finances to move comfortably forward with your business objectives as they are.

Theme or Layout

When creating a blog this is probably the most enjoyable aspect for most people. This is where you will create the look and feel of your site. You will want to select an appropriate theme in accordance with your intended content. You will also want to arrange your site in a way that is comfortable to the visitor but yet reflects a certain professionalism for your business.

Content Development Strategy

To be successful in the blogging business you will need to frequently update the content on your site. This is what will attract new visitors to your blog while encouraging current subscribers to return. How will you manage or develop the content you will need to be successful at keeping your blog updated frequently? Will you author all your own content and from where will you get your information? If you intend to outsource this task do you have the reliable means and resources to do this?

What will be the 'tone' of your delivery, or the objective of your content? Do you plan to maintain a consistent 'angle' or perspective when presenting your content or is spontaneity more preferable for your style. These are all questions you will want to ask yourself and plan for ahead of time.

Posting Schedule

Oh yeah, remember that your content is what makes your blog successful and the more you update it the better for you and the readers. You need to decide the frequency of your updates and if you have got the resource of time to maintain the schedule that will be needed. This is very important so be realistic when considering this particular but very important aspect of your blog.

Planning your home business blog requires careful consideration in order to develop an effective strategy for marketing your business. Establishing your business objectives and marketing strategy is essential when creating a blog to give it a clearly defined purpose and direction. By carefully focusing on each of the 5 steps we reviewed above you will be giving yourself a solid foundation upon which to build your money making blog.