Is it ok to make a profit?
Monday, December 8th, 2008
Let me preface this by saying a little about q/a’s I’ve read on here. It seems a vast number of people are simply against businesses making a profit. I understand this, and here’s my little story.
I ran a business for five years (which was pretty unprofitable). I had a hard time making money, and I had between three and five employees, which ate up all the savings I had and then some. I ended up with about $100K in debt. Even with all that, I found it hard to charge customers what I needed to make the business successful. I learned a great lesson after attending a workshop for the field, where they drilled this into us: It is not just OK, but expected and right to make a profit. After doing this, we started to break even, and finally started making a little profit. I eventually closed the business because I didn’t have the time to run it after taking a job to make ends meet.
Note that I’m not rich. I started the business with a fulltime job, and when I ended, I was working a fulltime job still. I ran the business when I got home from work, which consumed all of my free time and much of my wife’s. It was miserable. Incidentally, when we closed, we had people that called our home wondering if we would still do stuff for them, and we tried the home-business for a while, but it was still too hard on my wife and kids.
Let me say this:
If you work at a job, you are doing something for a profit. You hope to gain something that you couldn’t get without providing services or products, just like a business. You expect to get paid for your services.
The same goes for business. And the profit that the business makes is entirely dependent on what the consumers will pay. It has nothing at all to do with “corporate greed”, unless that product is a particular necessity over which the corporation essentially has a monopoly (like gas and electric prices), but even there it’s not a given.
You must remember that business owners are just people like you who have done something that succeeded. And they’re providing services or products for a profit, just like your job.
I know people have had it drilled into them in the last 40 or so years that corporations are evil, but please, I mean… seriously…. do some homework and figure out what you’d put in their place. Everything that performs trade with another entity is essentially doing the same thing, whether it’s a person, country, business, labor union or anything that buys and/or sells goods and services.
So what do you think?
Is the idea that hospitals are “for profit” wrong? Would we get better service if it was government-run? (remember that government still has to pay for the services, and government doesn’t make money, so it’s really you paying for everything anyway).
Is “Big Oil” really the problem they are being portrayed to be in the media?
Think about it, serious responses please.
ArachDog: Profit is the SOLE reason for the existence of a corporation. It’s either profit or service… and usually, service is an attempt to market, so it’s still profit. If you love a job so much that you’d do it whether you are paid or not, why would you not just do it without pay? Because you need it to live and function. Why does a business cut corners? The same reason people are found sleeping on the job, or don’t do as well as they could when they work. It’s the same principle, and it is no different. The people in the organization are not perfect, just as you and I aren’t. However, I’m inclined to believe in the overall goodness of humanity, and I believe that most people act in a generally moral manner. This means most businesses follow the same model. Either way, it’s not fair to pin up corporations as “evil”, as they are only a product of their employees/owners.
H20 Engineer: The fact that health care is for profit provides this benefit as well; the health care professionals are beholden to their clientele, because that’s how they get paid. Although I see massive problems with the health care system, the actual problem is governmental intervention in the health care industry, which has caused centralization of management (HMO’s), red tape and ridiculous hoops that doctors jump through, and has destroyed the insurance industry with frivolous lawsuits and ungodly payouts (lottery wins) for suits against them. And what makes you think that Government would run healthcare any better than corporations do? Remember that government is just made up of imperfect people too; just one way you only vote for change once every four years, the other you vote every time you open your wallet.
H20 Engineer: One other thing. There is nothing wrong with those executives making their salaries, and their insanely high bonuses. They may or may not manage their companies well, but poorly managed companies fall. And if they are managed well, they are obviously providing a service for which they are able to charge that much. A minimum wage employee is worth only so much to an employer, and the employer needs to make more than that from the employee’s work for it to be of worth for the employer. The same goes for the guy at the top and the bottom.
4rgum3nt: Well thought out and articulated. Thoroughly enjoyed reading it. I think you have some good points, but you are twisting the word profit from the way I am using it to encompass more things.
As far as profit as just bringing in the dollars, you and I will have to agree to disagree. A business is made to make a profit, to benefit monetarily from goods/services that benefit others. I think in this case both the monetary benefit the business receives and the benefit the client receives encompass your concept of profit.
The military is not profitable, however. In its role as the clean up crew for disasters or other charitable work, it is not the case that it is profitable (itself) though it is beneficial to those they are serving. The government does not receive a benefit; therefore it is not a business but a charitable institution, whose rules do not follow what I’m discussing.
4rgum3nt continued: That said, the military has produced (or enabled an outside group to produce, more appropriately) many things that have benefitted people worldwide, but they are the clients of the servicing corporations, not the corporation.
The problem with the concept of placing hospitals (via the government, aka socialized medicine) where the government wants is that the government is not necessarily worried about whether or not that hospital will be solvent financially. Or if they do, do you really want the government to hold a monopoly over health care? Doctors start businesses, and build hospitals (or used to, before the government stuck their ugly heads in and mucked it up, now it’s HMO’s). Doctors were required to verify that the location was right, that they’d be solvent. And their customers would voice their approval/disapproval by choosing to use that hospital or facility.
4rgum3nt continued:
Therefore, if the hospital provides good service, it will be used, otherwise another person will come in and capitalize on the first hospital’s poor service and build a separate organization to service the needs the first organization failed to service.
Government intervention discourages businesses from succeeding. Ask yourself how Toyota or other automobile manufacturers must view the government giving billions of dollars in loans to the Big 3, but not theirs. Would that encourage innovation and growth, or would you be more likely to pull out of the US because it is unwise to compete against a government sponsored enterprise? And what about the small guys, like my little store? Wouldn’t it have been helpful to have the government stick its nose in and offer me a few hundred thousand in capital so that I could keep operating? Yes, other businesses may suffer from a Big 3 collapse. However, they’d survive or not based upon their ability to adapt.
4rgum3nt continued: And that’s how businesses function. They’d find a way to survive. I think the Big 3 need to go under, because bailing them out just furthers the business model the unions have forced upon them - one they’ll still be forced to try to salvage years from now.
Randy
