An enterprise, carrying out entrepreneurial activity, must constantly monitor changes in the market sector in which it directly operates, identify negative aspects of market relations in time, and develop methods of counteraction to maintain its competitiveness.
Purpose and objectives of operating activities
The operating activity of an enterprise is the main type of activity for which it was created. The specifics of operating activities depend on the industry in which the company operates. The main types of operating activities of the organization are mainly commercial, trade and industrial relations. Enterprises can also engage in additional activities, but they will already be secondary (for example, financial or investment).
The operational activity of the enterprise is a priority, therefore, secondary activities can only be supportive in nature. Unlike investment or financial, operating activities are focused on the consumer market of goods produced directly by the enterprise, requires significant labor costs, frequent regular business operations.
Operational activity is the goal of the entire life of the enterprise. Income from operating activities is the most significant percentage of total profit.
Operational analysis
To control the implementation of operational activities, it is necessary to apply one of the effective methods - operational analysis. The main task of operational analysis is to control the costs of production, production output, the volume of products that corresponds to costs, the ratio of profit to production costs.
In addition, when conducting an operational analysis, the following points should be considered:
- what kind of return capital should be in the enterprise;
- how to mobilize available funds;
- how to use the effect of financial leverage;
- which is more profitable - rent or purchase of means of production;
- is there any sense in selling products at a price lower than the cost price;
- if you change the volume of sales, how will this affect the profit.
Operational analysis is essential to find the most profitable costs for the enterprise. He allocates costs to:
- Variables are the costs of materials and raw materials for production, wages of workers who work in the main production, sales costs. The lower the variable costs in the enterprise, the greater the profit;
- fixed - these are the costs of maintaining buildings and structures, depreciation deductions, the salary of the administrative body;
- direct - relate directly to the release of products;
- indirect - these are the costs of energy resources for auxiliary production, salaries for maintenance personnel;
- relevant - depend on management decisions;
- irrelevant - these costs can be adjusted in the production capabilities of the enterprise.
