“What is your understanding of how a business generates and maintains a profit? (Please provide examples)"
Any one got any ideas on how to approach this question? Would you look at it from a law firm’s perspective or businesses in general? I don’t know if it would be better if I used examples about the firm in particular (for instance how they’ve used legal tech to generate profit/attract more clients).
Differentiate between revenue and profits firstly. I would answer the question generally. Then apply to businesses you know.
If it was me, I'd say...
"A business generates profits by adding value via goods or services. The business profits because the price of these goods and services, either for consumers in the context of a Business to Consumer (B2C) business or a Business to Business (B2B) business, is lower than the cost of delivering those goods and services to the business itself.
To maintain a profit, a business must retain a client base. For example, my tutoring business obtains repeat business from clients in 20 countries, including Turkmenistan, Ukraine and China. Speaking to the maintenance part of the question again, repeat profits for my business revolves around primary income from delivering tutoring services and secondary income from referring tutors to agencies (a relatively passive form of income from which the business has made over £1,300)."