How do you measure progress toward such an undefined goal? We measure it by profit or![\"\"](\"https:\/\/berkonomics.com\/wp-content\/uploads\/2015\/07\/budgeting-150x150.jpg\")
revenue in dollars.\u00a0 But that is a number in a vacuum without at least two other measures: return on investment (ROI) and percentage of net profit to revenue.<\/p>\n
Comparing ourselves to the giants<\/strong><\/p>\n Microsoft, Google, Amazon and other great firms generate billions of revenues and profits and even have a high ROI and high net profit percentage. But some of our own small businesses have even higher percentages of return on investment and percentage of net to gross.\u00a0 So, the amount of money made is a number in a vacuum without the rest of the tools to tell the story.<\/p>\n How about companies formed to profit and give to charity?<\/strong><\/p>\n Many entrepreneurs begin their venture with the lofty goal that some portion of their eventual profits will be given to a sponsored foundation or directly to charity. \u00a0Some form \u201cB\u201d corporations to codify their vision into the articles of incorporation. \u00a0This certainly seems a satisfactory way to \u201cdo well by doing good\u201d or serving the needs of others. \u00a0Investors often have a problem with this though and are put off by the altruistic split of profit and attention by those founders.<\/p>\n And who do we serve with our profits?<\/strong><\/p>\n [Email readers, continue here…]\u00a0<\/em> <\/span>\u00a0It is common and certainly appropriate to tell the world An easy response to \u201cworld domination\u201d<\/strong><\/p>\n The next time someone tells you that their goal is world domination, you might politely smile and remind them that a more modest goal might better serve the stakeholders over time and that it might be a bit easier to accomplish.<\/p>\n","protected":false},"excerpt":{"rendered":" Often, we joke together as managers of companies or of people that our goal is \u201cworld domination\u201d or \u201cto crush the competition.\u201d\u00a0 But no matter how stated, the primary goal of an enterprise is to make money. The three measures … Continue reading ![\"\"](\"https:\/\/berkonomics.com\/wp-content\/uploads\/2018\/11\/sales-success-150x150.jpg\")
that our profits and success serves not just our shareholders but our stakeholders, which include employees, suppliers and customers in that mix. \u00a0A strong, secure company pays its bills on time, follows through on promises to its customers, and pays its employees a fair base and incentive compensation. \u00a0Companies living on the edge or losing money often cannot make those vital promises, affecting its reputation, security and equity value.<\/p>\n