The importance of profitability is obvious to every person in the world. For example, profitability is a universal principle that has been used to measure the progress of mankind. All of us consume whether it is food, energy, etc. In order for any endeavor to survive over the Long Term it must produce more than it consumes. Think about it, our country couldn’t survive on what was produced 200 years ago. In order to create more we must use the principle of profitability.
Profitability is the difference in value between what an object is worth and what the object cost to create.
Profitability = Worth - Cost of creation
Notice that worth is not simply the sum of the raw materials and the labor (time) needed to make the object. Since the time needed to make the object has a value, this would result in breaking even. Profitability is everything gained beyond what it cost and that doesn’t necessarily have to be money. Also, keeping with our focus on being intentional, profitability doesn’t just happen. It must be a goal in order for it to be achieved.
Profitability is completely dependent on uniqueness. If everyone valued everything exactly the same, there would be no way for people to become profitable. Profitability is the effect resulting from people exchanging value for value…but the individuals have to value things at different amounts in order for everyone to be profitable.
For instance, let’s say someone has an object they value at $5, while you value it at $15. If you buy it for $10, both parties actually become profitable by $5. However, if both parties valued it the same ($10), then they couldn’t be profitable.
The Creator built profitability into this world when unique beings were created. Trying to get people to value things the same goes against uniqueness and profitability. We need people to value things differently. Profitability is at the heart of the difference between two distinct philosophies about how life is sustained over the Long Term...
...which will be covered in the Next Post.