Defining Profit
April 13, 2009, 11:51 am
Allows growth, progress and a feeling of accomplishment.
Profit is the good result that comes from making an effort. If nothing of value comes out of an effort, then why would one make that effort? For now, let’s ignore the business cycle and the ordinary ups and downs that accompany almost every human endeavor. Let’s put aside the ebb and flow of exhilarating forward progress and frustrating setbacks that are a normal part of most work done by humans. We will cover projects, processes and accomplishments later.
The point right now is that “profit” as a naked concept includes a sense of value. The essential value of profit depends on the nature of the project or work being undertaken.
As with beauty, value is in the eye of the beholder. For an inventor, the realization of an idea in the market place might be the value. For a philosopher, the acceptance of concepts by world thought leaders might be the value. For many of us, it is the successful commercialization of a product or service either developed by ourselves or by the organization for which we work. In all cases, there is an expectation of positive, useful value.
“In all labour there is profit.” Proverbs 34
Examples of profit
(Field, Organization: Profit)
Business, corporations: Positive Net Profit; Increased Shareholder Value
Education, universities: Educated students; Positive creation by students
Medical, hospital: Lives improved, saved (physically)
Religious, churches: Lives improved, saved (spiritually)
Art, theater/museum: Viewers gain a perspective that is enlightening
Government, legislation: laws that have long-term benefits to country/world
Military, army: country/world is safe(r); freedom is safeguarded
Individuals, YOU: Contentment, You have made a difference with your life
The Morality of Profit
The concept of profit above simply states that something of value accrues to the person(s) or organization making an effort. It does not say whether that value ever materializes–only that it is the intent and hope behind undertaking the effort.
Neither does it comment on the morality of that value. If people are making an effort to achieve something of value to themselves, but which is a disaster for others, it still has that value for the perpetrators. Historical examples might be the land conquests of Genghis Khan, or the colonization of “new worlds” by the Europeans. Alternatively, the value in helping terminally ill patients at a hospice has a totally different concept of profit.
A personal judgmental statement here: profit that helps the most overall is the ultimate goal.
Up next: Profit is not profitability. What is profitability?
William Stong
william.a.stong@gmail.com
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