Introduction:

For this task I will be analysing the advantages and disadvantages about the business that Brad owns which involves transporting business people to and from airports using luxury cars and limousines. Addition to this I will also be explaining what the words budget, fixed, variable and total costs mean. One of the main topics that I will be covering is the fact that if Brad does nothing with his costs what the implication would be on the business as well as him and what encounters it will have.

Budget:

So what is budget? Budget is a financial document which is used to project future income and expenses. Budgeting is used by everyone who owns a business whether it’d be a large or small business; it is a crucial part of the finance side of the business. The process may be carried out by individuals or by companies to estimate whether the company is keeping within their budget and not over spending. The process for preparing a monthly budget includes:

* Listing of all sources of monthly income. * Fixed expenses such as rent/mortgage, utilities, phone bills. * Listing of other possible and variable expenses.
A business will always choose how much they are to spend on their resources etc from their budget which is calculated when the business starts. A budget may be prepared simply using paper and pencil, or on computer using a spreadsheet program like Excel.

Fixed:

Fixed cost is a cost that does NOT change even if there is an increase or decrease amount of good or service produced. Fixed costs are classed as expenses that have to be paid by the company which never changes. The cost is one of the two components of the total cost of a good or service, along with variable cost. For example one of the fixed costs of a high street shop is the rent