(接上文) Profits Two Views Efficient management A major cause of business failure is improper or inadequate management of people, technology, materials, and capital. Efficient planning, organizing, controlling, directing, and staffing can earn satisfactory profits. Some of the most profitable enterprises (e.g., Ethan Alien, Molly Maid, Blue Bell Ice Cream, H & R Block, and Coca-Cola) are also known as well-managed businesses. Such well-managed enterprises earn, on the average, around 5 percent profit a year on total sales. Of course, business profit rates vary greatly by industry, size of business, and location of the business, as well as managerial effectiveness. Economic profit The economist, like the businessperson, subtracts expenses from income to find profit. But the economist also considers opportunity cost, ( the cost of choosing to use resources for one purpose while sacrificing the -! next-best alternative for the use of those resources. For example, Jana Neal, ^ owner of a small florist shop in San Antonio, pays herself a salary of $9,000 for r operating the business. But if she could earn $20,000 working for a large whole- l sale florist supply house, her opportunity cost is $11,000. The opportunity cost is a measure of everything a person sacrifices to attain an objective. Economic l profit, then, is what remains after both actual expenses and opportunity costs \ are subtracted from revenue earned. < One practical difficulty with the economist's view of profit involves calculating opportunity costs. In some cases, passed-up alternatives cannot be measured in dollars. Assigning a dollar value to a missed job opportunity, to refusing a promotion, or to not meeting with a potential customer because of another meeting is difficult. The businessperson's view of profits is easier to calculate. Therefore, in this book, we emphasize business profit.