Why Are You In Business? – Leaking Profits: Article 1

“Even a small leak will sink a great ship.” —Ben Franklin

Brian Tracy said, “The purpose of business is to create and keep a customer.”

Peter Drucker’s opinion is that, “The purpose of business is to create a profit.”

What’s the purpose of your business? Don’t answer too fast. Think about it.

Many people lean toward Drucker’s view—that the sole purpose of business is to make money. But when you overemphasize profit, you wind up creating a culture that underemphasizes customers. And if you don’t take care of your customers, where does the money come from?

Yes, profits are important. You can’t serve your clients effectively if you don’t maintain a healthy bottom line. But when profit is your first priority, it’s only a matter of time before your customers realize that they come second—or even lower.

Purposeful profit or profitable purpose?

Many people are confused about the role of profit in a business. Some tell me that they feel that profit—or the pursuit of it—is associated with “greed”.

Really?

The fact is, profits are good, and they are the lifelines of business. Profits pay for wages and development. Profits enable you to grow, and to do more to serve your customers, and bring in more of them.

The opposite of profit is loss. And losses equal reduction in economic activity, fewer jobs, and, too often, the collapse of the enterprise. Continuous losses in a business mean there is no future for the people who work there and the customers who rely on you.

Anyone who is opposed to making a profit—or even moderately squeamish about it—is also opposing the future of the people who depend on that business for their livelihood. So, profit should not be your sole purpose, but don’t neglect its role in your business.

BOTTOM LINE: The business that does not show a healthy profit—as long as it is customer-centric—is reckless and its management is negligent.

Photo credit: photoXpress

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