1. Do you think it was important for Michael to stipulate his four criteria for the business, including the goal of generating a net income of at least $25,000 annually? Why or why not?
Answer: Yes, it is important for Michael to stipulate the four criteria during planning for his new business. Michael is wise to set criteria other than simply making a profit. The first three goals are more of a mission statement while the fourth is an objective for the company. However, the reasons why Michael stipulating the four criteria for the business is important are as follows. First, Michael wants to do something he enjoys. Because he has prior experience in a related industry and he has envisioned having his own business he will be better prepared to handle the responsibilities of this new business. Second, Michael wants a business that would give back to the community. Michaels positive attitude will be reflected in the way he handles employees and customers. Michaels business will probably come from customers such as university groups, church groups, civic organizations, youth athletic clubs, and secondary school groups. Because Michael is offering quality shirts at a modest price, he will, in effect, be contributing to the community. Third, Michael wants a business that would grow and be more successful every year. This foresight (wanting to grow and be more successful every year) will encourage him to make decisions that will profit the business not just in the short run, but also in the long run. Fourth, Michael sets the goal of generating a net income of at least $25,000 annually. It is very good to set a goal of generating a minimum net income to measure the success of a business. The problem is that there are no plans. What is he going to do if the company doesn't have a minimum net income of $25,000 annually? Or what if it generates a minimum net income of