Small business profit does not exist!
Profit in businesses, small and large, has been debated for centuries. Profitability as a reward for hard work and risk was the foundation of our society for two centuries. Making profit and wealth the evil enemy is a practice used to manipulate societies, wreck economies, start wars and bring down nations.
“It is the only source of of jobs for workers and of labor income” – Peter Drucker. Karl Marx called profit a “surplus value stolen from the workers”. Mr. Drucker was correct. Marx is and was and always will be WRONG.
The small business owner defines profit as the reward for the service provided plus the risk taken. The truth is that there is no true profit.
An entrepreneur defines profit as the reward for innovation. Innovation improves living standards and literally saves lives. By definition, innovation is out with the old and in with the new. This necessary but destructive process is the same as in the natural world like the four seasons of our planet. The end result is a healthier and stronger world.
Since there is no “surplus value” nothing is ever stolen from anyone. Consider every dollar you earn from a customer as a confirmation of appreciation given willingly by those you serve. Be proud to show that your entrepreneurial venture or small business is earning a profit. The vast majority never do. Wear that accomplishment with honor. Never apologize for your success.
What risks and sacrifices have you made to be successful? What recognition do you receive for that effort?
- What we often see as profit is simply the cost of doing business plus earning a living wage as a business owner.
- Every dollar of a small business owner’s earnings is spent either directly or indirectly for the benefit of the business.
- This is why so many small business owners say that the business owns them.