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Profit is essential to any business. No profit, no growth.
2 Min Read
Contrary to what most in political office are telling the American people, profit is not a dirty word.
America is founded on the free enterprise system which allows those that want to be creative, and are willing to invest their own time and money into starting a business, the opportunity to make money.
If the individual works hard and produces something the American people want to purchase the company makes money.
If they produce something the whole world wants, then that individual might become another Bill Gates.
Profit is not a dirty word.
On the contrary, as every business owner knows, profit is necessary to continue to grow their business.
Why is profit needed?
Receivables—When most companies were relatively small it was not unusual to have $20,000 or $30,000 that was outstanding. Being small was a big deal and it greatly hampered cash flow. As the company grows guess what else grows. Right, receivables have now increased to perhaps $80,000. How is the company owner supposed to finance the additional $60,000 now tied up in receivables? Well, it comes from making a profit and using those profits to fund the receivables of their growing business;
Inventory—The same principles apply to inventory. A small company may only have $10,000 or $15,000 tied up in inventory. However, as the company grows the need for more inventory grows as well. Now the company may need $50,000 in inventory. Again, how is the additional $35,000 or $40,000 funded? It’s funded by the previous profit the company made;
Expansion—Growing companies need more space, technology, additional locations and more equipment. How is expansion funded? It is funded with the profit the company made.
Profit is essential to any business.
No profit, no growth—it’s just that simple.
Believe it or not, 87% of all businesses in the U.S. have 25 employees or less.
Small businesses are the fabric of this nation.
Small businesses like yours and mine produce jobs.
Those employees pay taxes and spend money within the economy making it a win-win for everyone.
Don’t let anyone tell you making a profit is a dirty word.
Without profit, companies fail to have the funds they need to expand.
No expansion means the company, and therefore the overall economy, is stagnant which eventually ends in going out of business.
I love being in business and I am confident those reading this article do as well.
We each provide products and/or services that are of value to someone else.
Be proud to be a business owner and be proud your company is making a profit.
Profit is not a dirty word; it is essential for the future existence of your business.
Pass on the good news to your friends, neighbors, and those in political office.
Stand up and be counted. Help those around you understand what profit is all about.
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