Profitability A few of us hold the belief that corporations should not earn a profit. We think that profit, especially a large amount, indicates that the employees and/or customers are somehow being victimized. In fact, a company cannot stay in business for long without earning a profit. Often, it must make more money each year to continue in business. If the company goes out of business, everyone there is out of work. Usually, anyone the corporation owes money to is also out of luck. When a corporation is profitable, management can develop new product lines, which keeps the company competitive. Remaining competitive means continued sales. Profits also mean that people are employed and paid. The company can purchase needed equipment and supplies, which helps its suppliers remain in business. Shareholders receive dividends, and/or the value of their stock increases, making their investment secure. A profitable company pays taxes that support schools and other local functions. Companies also pay corporate taxes to the federal government, reducing the burden on individual taxpayers. In short, the profitability of corporate America is crucial to the success of our economy and our entire way of life. If you have negative feelings about profit, try to evaluate why. The attitude that "everything should be fair" may be interfering with your judgment. You may see one company's profit as another's loss. You might know some managers who make decisions and knowingly or unknowingly hurt someone else in the name of profit. This does not make profit, or even high profit, evil. Profit is not intrinsically evil, it is simply profit. For a company to maintain employees, offer high-quality products and services to its customers, and continue to survive, profit is essential. Don't assume that every existing firm is profitable. Some companies are in business for years before they introduce a product to the marketplace because it takes so long to develop their product. These companies are usually either supported by private investors or publicly owned. Sometimes they are owned entirely or in part by a larger, more profitable corporation that supports operations until they become profitable. Other corporations have products to sell but do not sell enough to pay the bills. This might occur for several years in the beginning, or a company might have profitable years followed by losses. Many, many companies do not show a profit every quarter of every year. If you interview for a company that is not profitable, find out why. If the firm is publicly held, you can find financial information about it at the library or on the Internet before the interview. If not, you may have to talk with the interviewer about profit, or lack thereof. Don't automatically discard an opportunity because the company is not profitable, but find out what is going on before you jump at it. Every employee should be interested in helping the company remain profitable. To be eligible for a highly paid job, you must see profitability as healthy and desirable, and you must be willing to work toward increased profitability. You must be able to think in terms of what you can contribute to profitability, not just the short-term welfare of you and those around you. As a business person, try to see everything from the perspective of profit, and many things will begin to make sense. Some practices you now observe will make less sense, and you may be able to make a real difference.
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