Essay about Business Threats

Submitted By mlaflower
Words: 945
Pages: 4

Business Threats

The article chosen for the professional article critique assignment is Case of Business Threats by Tom Crouser. The article appeared in Quick Printing and was publicized in the January 2013 edition. The article was located using the online library for Ivy Tech Community College. Most business threats remain the same over time, regardless of technology changes. Crouser identifies four business threats as financial, organizational, sales, and occupancy. The article focuses on the third and fourth business threats, sales, specifically sales trends and sales activities, and occupancy. The first financial threat, financial, is important because according to Crouser, without cash we die. Second is organizational, and without performing the functions, such as getting jobs out, getting jobs in, and getting paid, weakness is introduced into activities and are less able to rebound from adversity (Crouser, 2013). For a business to accurately figure sales trends, the business needs to figure sales for the last three years and then add the current year. Sales can be up significantly this year, but could have been flat over four years. Or sales can drop this year, but be up over four years (Crouser, 2013). Then in order to get a complete picture of sales of a business, project the current year based on the current year’s average month and a seasonal projection (percent of typical sales year-to-date) (Crouser, 2013). If the business has a 15 percent growth over three years, then the business is among the stronger companies (Crouser, 2013). Three to five years established a good trend. Sales are a result of selling activities. Relying on only one or two growing accounts is a threat to business base (Crouser, 2013). Sales can drop without cause on the business. A downturn in customer’s business or one customer lost to acquisition can hurt (Crouser, 2013). The cure is constant selling activities. A business should always be seeking new accounts (Crouser, 2013). Location is most commonly overlooked in a business’ success or failure, but location can make or break a business. Crouser does not recommend doing a lease because most leases mean the business could be forced to move with 30 days’ notice. While the original owner of the leased property may not ever do that, Crouser offers the idea of, what if the original owner passes and the heirs sell the property, then the business is out. Crouser also warns against a property owner who says, “Don’t worry about a lease.” Crouser states many instances where this has happened and the property owner was actively marketing the property and did not want to be held to a lease. So when the property sold, the business is forced to relocate without any notice. If a business owner owns the property, they are considered a C corporation, and Crouser recommends a fair market lease. Crouser warns C corporation owners who charge rent payments to themselves based on how well the business is doing from year to year because this can be found as evading corporate taxes. A lease based on market values, is more of a tax issue, but can easily be a business threat (Crouser, 2013). The financial, organizational, sales, and occupancy business threats are the most common, and often the most preventable (Crouser, 2013). What appealed to me most in the article was the occupancy factor of a business. I never looked at leasing a property for business purposes to be a negative. However, according to Crouser, leases are unstable and unpredictable when it comes to maintaining a successfully operating business. It had never occurred to me that property owner who lease their business locations would demand a business to relocate in 30