Trading Activity
Trading activity is any business that is carried out with an aim of making profits although the possibilities of making losses are also much possible. Different trading activities require diverse factors for its implementation and operations to be a reality. That is, the market, security, capital, legal requirements, economic status of the country, infrastructure, religion and cultural beliefs and political stability (Altman, 2006). Consequently and from the later revelations, a business person can therefore come up with various trading activities depending on the favors provided by the factors. Some of these activities may include software Developing Business, oil mining, and the Assembly of motor cars. These are trading activities that might result into reasonable amount of gains.
Venturing Into Software Development Business
Software is a group of computer programs and related information that directs a computer on its functionality. That is, things to do, when to do them, and the manner to execute them. Software development is a process of creating a program or a number of programs that can achieve the work of effectively instructing the computer. It involves skilled labor, capital and other inputs to develop the software to an output. Recently, software developing industry has been one of the most rapidly growing business activities globally. This is as a result of increased insecurity, inaccessibility of some services and unaccountability in big organizations and in governments (William, 2000). The software’s technology will also reduce the cost incurred in labor as it may do a piece of work that would have been done by several laborers at a given span of time, when working with technology accuracy is realized more compared with working manually and it also gives a good reference as it stores information and with easy retrieval.
For a software to be developed a company requires an influx of finance, just like many profitable business it is usually difficult to acquire the initial capital. Consequently and owing to such inadequacies, there comes the need of seeking monetary support from other financial institutions and stable individuals. In order to achieve these there some monetary policies required in the process and they include provision of loans, contributions from relatives among others, business wise this is called trading on margin where margin account is considered in keeping this account and not cash account.
To venture into a business one has to be curtained of the safety of the investment. Therefore, the business has to stand and convince in order to raise the capital required. The third party, in this case, the financial providers of the business would need to have trust and belief on the business (William, 2000). Software development as a business will win trust of the investors since its importance is outstanding on only in technology but in other sectors like medical service and telecommunications that are vital for the survival of any economy in the world. It is evident that the world has been experiencing considerable growth but the most notable is technology. It has been experiencing robust growth with its effects felt in almost all sectors (Church land, Patricia and Sejnowski, 2001). Henceforth, the security on improvement adjustment and much more betterment of software is expected. It is easy to have the belief that software development is a necessity in the world of business because of its capability to curb insecurity of documents. What’s more, it brings about accountability and accessibility. Furthermore, entrepreneurs will also require to be assured of the business future continuity and growth for them to venture into it. Hence, as growth and change engulf the sector, the need for the installation of newer technology continues to soar. Lately, software developing trade has been rapid with its market expounding, it is not only companies that need this software but also schools and hospitals (Church land, Patricia and Sejnowski, 2001).
Any business venturing into the sector of software has the ability of enjoying immense competitive advantage though strong competitors in the market and wrong governance might hamper such advantages (Altman, 2006). Comparing the use of computers and manual work it is always evident that computer will simplify work to considerable levels. In addition to such factors, it is economical in terms of space, material used and operation cost as compared to the use of laborers as a single computer can stand for a good number of workers. Furthermore, computers have the capability of working round the clock an added advantage when compared to human beings. Consequently, investors can rest easy having the knowledge that the future of such ventures is bright and that its failure can only be attributed to other factors other than the business itself.
Finance is one of the most important assets that the company requires. To this effect, managers ought to have a clear plan towards the way of financing the process and ensure smooth running of the organization and achievements of the company’s objectives (Harry, 2007). Before development such projects can commence, the management of such projects should have a plan for a budget for estimated cost and the actual cost to ensure that there neither either cash that has gone into a loss nor any misappropriation of the company funds intended for the purpose of developing and implementation of the projects (Altman, 2006). However, all is not green due to issue of uncertainty involved in both demand and supply of commodities. Accordingly, managers have to come up with methods to indentify such and policies that minimize such risks.
After all the production has taken place and the output is ready the business has to come up with a market price for their commodity (Elton, Goetzmann, Brown, and Goetzmann, 2009). To effectively achieve this, pricing policies are important. That is there is need for looking into the current pricing regimes of the commodity and while trying to maintain competitive advantage ensure that the cost of production is in consideration to avoid losses (Church land, Patricia and Sejnowski, 2001).. The business has to know all the expenses incurred in the course of production. That is, the labor involved, capital, assets depreciated or damaged, time used, demand and supply consolidate it with the expected profit and find the estimated value of the final product prices (William, 2000). Though initial introduction of commodities in most cases involves high pricing to cover the cost incurred during development, at times it turns out not a good move if there are strong older competitors in the market of consideration.
In software development there is no intensive labor involved since single person can up with every stage of the developed software. This therefore interprets that the price of the final product is not much being influenced by the labor if even though it plays a key role. When developing a system other software’s are used, computer and internet incur cost (Elton, Goetzmann, Brown, and Goetzmann, 2009). Computers can be affected and even infected by viruses from the internet causing loss that will need to be recovered in the returns of the developed system increasing the cost of the software.
Capital required in developing the software at each and every stage of development is high and most of this finance is borrowings from financial institution and other sources, so, their refunds will be immediate once the software will begging to trade in the market (Jameson, 2010). In addition to this, demand and supply will influence the pricing of the product it has always been seen that the price of the product is directly proportional to its demand. If the demand is high the price of the product are expected to be high too and its vice versa is true. For the supply, when the supply is low the prices increase and its vice versa is also true (Harry, 2007). However, uncertainty in both may result into unstable pricing regime that might have adverse effects on the profits that the company is to realize. Accordingly, there has to be better ways of dealing with such uncertainty that is evident when dealing with products.
Different business at initial stages and at maturity consumes time. Time can be in consumed in two major stages of production of an item. In the initial level till the final level where it becomes a product and secondly that time the product remains in the warehouse (stores) before it is bought from the business (Jameson, 2010). Though at times some commodities do depreciate when more time taken is taken during the storage, software development had not experienced such due to its demand in the market, but there is intensive time consumption as the software is developed from stage to stage henceforth it influences its price.
After doing every calculation on the capital consumed, after considering the market and demand for the product, the assessing the assets used and depreciation that had occurred on the assets and after considering factors such as legal procedures and political environment of the country the software develop can come up with the price of every product (Harry, 2007). The amount that the entrepreneur sets is an amount above that in order to enjoy the profit of the products.
Advantages of software development business
It is a technological business that enables in modern world operate faster and round the clock.
Compared to manual way of working machine can work for long hours.
It reduces the cost incurred to hire workers as one machine can perform work to be done by more than 100 people.
Does not require supervision for its work.
High standard of accuracy and a very presentable work.
Improves the economy of a country.
Disadvantages of software development business
Require high cost to install.
Cause unemployment thus poor living standard
In case of corruption on the file or virus attack the system functionality is distorted.
Need professionals to operate who may at times are not ready available.
References
William F. S. (2000). Investments. London: Prentice-Hall publishers.
Harry M. (2007). Trading in the software business. California: SAGE Publishers.
Altman, I. (2006). The Concept of Intelligence: A Philosophical Analysis. Sudbury: Cengage learning.
Church land, Patricia and Sejnowski, T. (2001) The Computational Brain. London: Oxford Publishers.
Elton, Goetzmann, Brown, and Goetzmann, W. N. (2009). The theory of investment analysis. Hoboken: John Wiley and Sons.
Jameson, P. L. (2010). Trading activities policies. Oxford: Oxford University Press.
