Personal MBA: Profit

Personal MBA: Profit

This one’s pretty straight forward. Profit is the portion of revenue that’s left over after a business pays all of its expenses. For any business to continue to exist it has to make at least a small amount of profit.

Kaufman explains that not only does profit allow a business to keep its doors open, but it also provides a cushion against unforeseen expenses. An entrepreneur never knows when his or her expenses might rise, profit allows the business to absorb those extra costs without going into debt.

Kaufman makes a great point toward the end of this section. He states, “Some people believe that the purpose of a business is to maximize the amount of Profit generated, but that’s not the only reason businesses are created. For some people (like me), business is more of a creative endeavor—a way to explore what’s possible, help others, and support yourself at the same time. From this perspective, as long as you’re making enough Profit, your business will continue to be successful.” These are the same reasons why I started my pipe tobacco subscription business. I love being an entrepreneur, helping people and providing value to the world. My business doesn’t make a lot of profit, and it may never make enough to support my family’s expenses. In spite of this reality, I love the feeling I get when someone gives me good feedback, explaining how they love my service and can’t wait for each new box to arrive. It reminds me of the saying, “success is what you make it.”

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