Business Is About Profit

By Ken Matesz

“In the state of nature, profit is the measure of right.”               Thomas Hobbes

The only reason to run a business is to make a profit. Period.

If you don’t like that statement or disagree with it, you don’t belong in business and your business venture will probably fail unless it is subsidized by some industry or an outside agency or person. It also might survive a while being subsidized by debt.

When I first went into business about 25 years ago, I did not understand this important fact. I thought I was going into business to help the world. Specifically, I went into business building timber frame homes. It was my contention that timber frame homes (built the way I wanted to build them) were environmentally superior to other ways of constructing houses. They have low embodied energy and typically are not produced after clear-cutting forests for timber. I wanted to use sustainable methods like using reclaimed timber and using natural materials to enclose them. Some of my timber frame homes were enclosed with straw bales. I encouraged the use of masonry heaters to heat them. I wanted to help save the world by building these environmentally superior homes.

I didn’t know that business was only for profit.

Part of my strategy and philosophy also was to try to market my product – timber frame homes with straw-bale enclosure and heated with masonry heaters – to people who likewise believed in this philosophy but did not necessarily have the resources to build an expensive house. In short, I wanted to sell my products as cheaply as possible to encourage people to actually buy them. Besides, I loved my craft and enjoyed doing it. Why would I need to get paid a lot to do something I like so much? My “pay” and profit was my job satisfaction – or so I thought.

The result? Many wealthy people who could have afforded to pay full price for my services bought my products at my “discounted” prices and laughed all the way to the bank while I and my family remained poor and even went into debt. When I first went into business, I was debt-free. After several years in business, I was in hock up to my nose hairs.

Not only did I not make a profit, but sometimes I made less money than if I had worked at McDonald’s flipping burgers. I remember one masonry heater project back in the mid-1990s. I built a very standard brick masonry heater for a doctor in Kentucky. When I calculated my hourly pay for the job after it was complete, I found I had earned about $3.50 per hour. This I did for a physician building a custom solar home on a significant acreage.

I was young and dumb. I did not understand that the only purpose for going into business is to make a profit. If the physician ever sells that house, she will make a large profit off my stupidity. I have learned by experience. Now I want you to profit from my mistakes and former stupidity.

All of nature is about profit

It’s time you got in sync with the fact that all of nature’s processes are about profit.   A mighty oak grows from a simple acorn. Then, the rest of its life it produces thousands of acorns – a huge profit from one acorn. A stalk of corn grows from one corn kernel. It may produce two ears each with more than 500 kernels on it. A thousand kernels from one seed is a 1000% profit. Two rabbits will copulate and, from that one encounter, produce about seven offspring. That’s a 350% profit from two rabbits. Nature knows how to take a small amount and turn it into a large amount and thereby create abundance.

Humans naturally are profit-oriented. They just don’t notice it. Why do you get out of bed in the morning? Because you think you have something to GAIN from the coming day. Why do you get a glass of water? Because you want to improve your state of being, the way you feel. That’s profit. Why do you pay for gas in your car? Because you believe the benefits the car gives you are more valuable than the cash needed to buy the fuel. (You profit more by having a car that operates than if it didn’t.) Everything we do in our daily lives is to improve our station in life.

Conversely, we have more trouble doing tasks from which it is hard to see a profit. Washing dishes and cleaning the house are tasks that are more like treading water. By washing the dishes every day, you simply maintain the state of affairs in your life. It is gain in the sense that you have space on the counters to prepare food and clean plates from which to eat. But, then, you had clean dishes yesterday and the day before, too. So washing them again today doesn’t really advance your position in life. There is minimal profit from these chores; that’s why it takes more motivation to do them. That’s why we like automatic dishwashers; they free our time for more PROFITABLE pursuits – activities that we perceive as improvements in our lives.

Your Customer Will Profit

When someone hires you to build something, he expects to profit from what you create. He believes it will improve the quality of his life. He might believe it will save him time or money. It may satisfy his desire to be more comfortable. He may crave more convenience. Whatever your client’s specific motives, the general motive is to PROFIT from having you build him a something.

You must profit from producing that which profits him.

You must make a profit or you will not stay in business long. Or you will stay in business only by accumulating debt. In that case, your business will last until you can no longer shuffle your bills around. When the bank comes to repossess your work truck because you missed your payments, your business is done.

Avoid that.

Work for profit – the only reason to be in business.

Ken