What is the goal of any business?
One day on linked-in my colleague Parth Amin just asked a random poll with the above question and a few following options to select one.
A. To create value
B. To solve problems
C. To get adapted in the market
D. To make money
Well, people started responding, I selected option ‘D’ and some people started arguing that, with all valid reasons. My view on this was a bit different so I am putting it here. Please comment what is your opinion?
So for me, the goal of any business is to make money.
People argue that Money generated in business is in exchange of something. May it be a product or a service you render. But if either of them ain’t adding any value or solving a problem then how on earth you can expect to earn money from that.
Humm, looks correct, but no, wait. So if you don’t add value money is not generated. What is last goal here ? Now you might say, money is “by product” of business, keep reading.
If your product is not adding value, yes you cannot exchange money. So you pick such product/service. But when you start a new business you think “which product/service” I should use so I get customers and I do better business.
So, yes, value and ethics are all good to do a better business. but why you are doing this? you want to add value and ethics, so you get better customers.
What a businessman wants at the end of the day. If he doesn’t add value he cannot do business. But he does not do business to add value. He do business to earn.
In the title image, if the shop-keeps do not sell products that add value, user will not buy, that’s his implicit requirement, If he doesn’t do ethics, he will eventually loose customers. Correct, and he does this all to do what ? DO a business and goal of his business is to Earn Money.
What is the goal of these shopkeepers? By not adding a value or ethics, they will suffer business. But they are doing business to earn. So Value and Ethics are essential part of business but not the ultimate goal of a business. What the question asked.
Going Beyond Profit
Even you yourself can think that you want really to do something for mankind and still not thinking for money and profit. How do I see you. Well, you need to understand, the question was business and their goal of a business vs goal of a person can be totally different.
If you want to go beyond profit and really add value to people, you still can do. But then you are not a business man and not doing a business, you are entrepreneur and running an enterprise.
And that is why a term business is not so common in new generation, we encourage them to add value to persons life, its new definition of business. But if you are doing a business you have to make profit.
What you should choose
You must decide your goals first. But wait, before you chose to be an Entrepreneurship, just consider these points.
- Okay, so you don’t want profit, but remember to run you need money. You can survive to create a PMF, but it should proof a solid value add to get funding.
- No matter how good a value is added, in long term if this is not charity, even investors want profit. “Real or imaginary for any one, but should be en-cashable for investors at least”
- Can you run longer if you add so much value but cannot make profit? Do you have enough fund yourself to sustain to ENJOY YOUR VALUE ADDITION TO MANKIND BY YOUR OWN MONEY? You can, but is it a business anymore?
Conclusion
And now, thats my conclusion, yours may be different
Does this sounds okay to you?
- You start a business -> You Don’t Add Value -> You got customers -> You Profit -> You add value
- You start a business -> You Don’t Add Value -> You DON’T get customers -> You Profit -> You add value -> You get Customers
I means, you have to understand, you are focusing to add value to get better business, because if you don’t do that, you are out. So, only ideal line of goal is
- You start a business -> You Add Value -> You got customers -> You Profit
You can continue on your own or investors fund in pursue to prove your idea correct, that this is/will add value and now/future belongs to us and WE WILL MAKE PROFIT. Are you still working for a by-product?
Remember, once your fund is finished, to continue, you need money. So your business must make money at the end. And to be profitable you need customers, and to have customers you must add value to them.
So, Your goal is to add value and your business’s goal is to make money.
