Why Are You in Business?
July 23, 2009
People start businesses for many reasons: because they’re passionate about something, because they see a market need, or sometimes because they like to start businesses. But there is another significant consideration in any business that cannot be ignored, and yet, frequently is.
Let me explain…
I was listening to NPR on my car radio one morning, and there was a segment about the medicinal marijuana stores in California. In case you haven’t heard about these, you can get a prescription from your doctor, take it into these places, and walk out with high-quality marijuana to be used to help manage chronic pain.
Of course, although legal under California law, apparently, federal law supersedes this, and there’s an ongoing conflict over the legality of these establishments. Fortunately, this, and the underlying ethical questions are not the subject of this article.
What is important are the comments of one proprietor who was weighing in on the issue of taxing this product to help alleviate the current economic crisis in California. Speaking to the interviewer, he made comments to this effect:
“We’re in business to pay taxes, create jobs, and do good for the community.”
People driving around me must have wondered what was going on, because I’m sure I must have had the most bizarre look on my face after hearing that. That’s because I strongly disagree with that statement, and with the business sentiment it embraces.
The purpose of any business, at least a for-profit business, is to make money for the owners and investors of that company. And for non-profit organizations, the rules are pretty much the same – you can’t provide services, support, and legislative advocacy for your members and constituents if there’s nothing in the bank.
Don’t get me wrong; I’m all for creating jobs if adding an additional person to your team generates revenue in excess of the expense of hiring, training, and paying that person. For that matter, you should take a long hard look at everyone on your payroll and make sure that the same return on investment holds true today.
Doing good for the community? I’m all for that too – if that’s something you choose to do with the profits of your business and as an owner of the business you can do that. But it’s not the reason you’re in business.
You’re in business to make money for the owners of the business who have invested time, capital, and effort, and frequently taken considerable risk to create, develop, and grow the business. People seem to have come to the unfortunate conclusion that making money is somehow “evil.”
It is not. Small business is where most of the growth in our economy is going to take place in the future, as it has for the last few years. And professional and trade associations help provide community, networking, and support to help fuel this growth.
This is important to keep in mind as you make critical decisions in your business.
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I completely agree with your position. It seems that we are on our way to the society depicted in the novel “Atlas Shrugged,” by Ayn Rand and that is frightening aspect. I am not sure how we, as a nation, have come to this.