The goal of any businessman is to have a profitable business. In order to build such a business, you need to know what profit is in essence. It seems that everything is clear here – profit is a positive difference between income and costs for the production or purchase and sale of goods and services. Accordingly, if you want to make a profit, you need to increase this difference.
But if you increase the difference, it may happen that no one will buy anything at all. Why? Because in fact, profit is the difference between the cost of producing or purchasing and selling goods or services and the value of these goods and services. In other words, a profitable business is when the value of a product is higher than its price.
The difference between value and price is the real profit. There can also be artificial profit, when the price is set without relying on real value. A product whose price takes into account the real profit will sell well. A product whose price includes an artificial profit will sell very poorly, because it has a low value.
How to build the most profitable business
The older the product, the less its value. The value of the new product is higher than the value of the old product because the product is basically an idea. When this idea is not widely spread, it has a high value, because it increases the value of the person in whom it is embedded through the product, it makes it more perfect against the background of other people.
If an idea has been circulating for a long time and many people have a product that represents it, then it does not increase the value of the person who owns this product so much. That is why all the world’s leading companies are constantly implementing new ideas. They need them in order to raise the real value of their products and sell them dearly.
Modernizing ideas is the only way to have real, not virtual, profit and therefore profitable business. When there is no product that has a high real value, there are numerous problems with the sale of goods. The cost of solving these problems often becomes so high that it is easier to destroy the old product.
Really profitable business
In order to facilitate the dissemination of new ideas in order to create new values and make it cheaper, the world’s leading corporations create markets, their own markets. Having your own market is an absolute competitive advantage. As practice shows, only companies that have their own markets feel confident.
All others are under constant threat of bankruptcy or sale. Recent examples include Nokia, Volvo, and PSA. The first were sold first to Microsoft, and then to the Chinese, the second and third were immediately sold to the Chinese. They had to be sold because the products of these companies did not have their own markets.
The market is based on an idea. It is embedded in one person or a certain set of people, which then form the market. In other words, the market is a collection of people who have implemented this idea. Of course, the classical view on this point contradicts this view, but the days when the classical view worked have passed.
Profitable business from scratch
These are very different times that require different ideas. These concepts should be taught to all employees if they want to have a profitable business. Only employees with modern ideas can make a profit, because only such employees will be able to work in a real, and not in a fictional market.
The key to having a profitable business is having a personal market built around an idea and having the right specialists. Only when there are specialists who are ready to work in a real, not invented, market, you can conduct effective activities. And, of course, there must be this very idea.
Profitable business on your own
We must also keep in mind the fact that everything flows and everything changes. This means that ideas have a life cycle. They are introduced, embodied and become obsolete. After the idea has outlived its usefulness, the goods for its implementation become unnecessary. For example, the idea of communism was left in the past and the goods that served for its implementation became unnecessary.
Once the oktiabrenka icon or the pioneer’s tie were very popular products, but now they are not needed by anyone, but they have become necessary products that serve to embody new ideas: mobile phones, computers, and much more. Accordingly, in order not to be left on the sidelines, you need to constantly create new markets based on new ideas.