A Proper Perspective of Profit

 

What does profit mean to you?

Your immediate inclination is probably positive. Profit is good. It’s something we want. It’s hard to succeed if we’re not profitable, right? So it’s essential to growing a business.

However, I’m not asking whether profit is good or bad. (I think we all agree that profit is good.) But how do you define it?

Today, I want to explain how each of us can have a proper perspective of profit. In order to do this, we need to define each of these terms.

Proper. If something is proper, it is suitable, appropriate, or right. It is the correct way of doing something, or in this case, it is the correct way of viewing something.

Perspective. Our perspective is the lens through which we view things. It’s our attitude or disposition toward something, and it’s our point of view. Our perspective is important, because the way we view things changes how we do things. Therefore, our perspective is essential to understanding and applying this definition of profit.

Profit. Profit is a term that has evolved over time. If you look at some dictionaries from the early 1900s, profit is defined as payment for value added. Historically, it was about the money earned for creating value. Only in the last 100 years has the definition evolved to simply be the difference between revenue and expenses.

Too often we oversimplify and undervalue profit by only asking, “Did you make more money than you spent?” In doing so, we fail to recognize the vital importance of adding value.

A couple of years ago, Volkswagen was caught cutting corners in vehicle production to save money. Some of their diesel-engine models contained software that allowed them to cheat emissions tests in the US. Volkswagen confessed to cheating, and in this effort to save money, lost billions of dollars. Because Volkswagen was more concerned with earning money than adding value, they lost dollars and their reputation in the process.

The best organizations, companies, and leaders have a proper perspective of profit. Sure, they understand that we need money, income, and margin to survive and thrive. But, when we view profit through the lens of adding value, the result is better products for our customers, enhanced experiences for our clients, and positive environments for our employees.

If you’re adding value, dollars will follow.

Do you have a proper perspective of profit?

Seek ways to add value to your work this week. Your profit will have a greater impact than a simple dollar amount ever could.


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Today, business means more than just mere products and services. Your organization needs to stand for something. Branding is what you tell the world; leadership is how you make it come true.

No one knows this dynamic better than Kevin Paul Scott.

Companies turn to Kevin for advice on how to up the meaning-quotient in their businesses, so that employees and customers alike champion the business as if it were their own.

Let Kevin come and teach your group about how to build a business and communicate corporate values in a way that resonates with consumers.

His speeches include:
• Building a Business with Meaning
• Leading When the Majority is Wrong
• In Changing Times, Hold to Unchanging Principles
• The War for Talent: Recruiting and Retaining Top Tier Talent
• Essential Exchanges: What You Have to Give Up to Go Up