The effects of global recession on local economies Essay - 1

The effects of global recession on local economies - Essay Example Multinational and international industries, local industries, government establishments and the consumers themselves are all affected by the changes in the economic standing of the country. Global recession has a great impact on the value of local and international currencies, generally affecting end-users and households. In effect, the buying capability of the consumers goes down. The general concept in putting up a business is simple, to profit from it. However, this simple concept requires a lot of fields to be taken into consideration before investors or businessmen can make it happen. In a basic business planning, the structure of study for putting up a business or developing an existing one is as follows: investment, resources and raw materials, market demand and profit and loss forecast. Investment is the capital cost is one of the most common things that are taken into consideration in a large or small medium business setup (Northcott 1992). This is the total amount of currency or money a businessman or a corporation invests to put up or develop an existing business. The total cost of the investment will be a basis for the company to determine the total cost of their liabilities. There should also be funds or a part of the budget that goes to the emergency funds for unexpected situation. These are part of the investment cost and are called funds margin or more commonly known as petty cash. Although this is the type of fund that should be replenished every month, quarter or year depending on the initial business funding structure of the company. Its initial will still be included in the total investment cost. Resource is also one of the major factors to be considered in putting up or developing an existing business. Raw materials are products that are bought together for the use for production purposes (Blair and Hitchcock 2001). There are two major types of categories in the business industry: the