Question

2. Why is reducing costs key to the longevity of businesses?

Answer 1

Cost control is the practice of identifying and reducing business expenses to increase profits, and it starts with the budgeting process. A business owner compares the company's actual financial results with the budgeted expectations, and if actual costs are higher than planned, management has the information it needs to take action.

As we know the Profits = Total revenue ( TR) - Total cost (TC)

As long as we are reducing the cost , it is beneficial for the longetivity of the business , as due to fall in cots , Total cost will also fall, futher whivch lead to rise in profits for the firm . Consistent reducing cost will lead  to consistent higher profits , which will lead to longetivity for the business .