If your business makes money, are you really working for yourself?
This seemingly obvious question may have a different answer, if we take a different perspective — whether we are enjoying the trend, getting paid for our work, or making real profits.
Let’s say we discover a new demand and we are the pioneer to enter this market and build it up.
We make good money. We are really enjoying the benefits of the trend because we are the first.
More players will enter into competition naturally. And making money will be harder.
So maybe after a few years, our revenue can barely cover our expenses.
At this point, we are basically getting paid for our work.
We are working for the society to satisfy a certain demand and the society pays us “salary” for it.
However, if we innovate to reduce our costs and provide better solutions, we are making real profits.
When the cost for everyone else is 10 dollars, we are able to reduce to 5 dollars and no one else can do it. We can price anywhere between 5 and 10 dollars.
What we have done is build a moat and we are making real profits. The money will be much better compared to the work we put in.
Real profits comes from no competition because we are always in the lead.
Summary
In every industry, competition will consume all the inefficiency and over-paid players, and as a result, we are just taking “salary” from the society.
Only continuous innovation and improvement can create room for real profit.
Therefore, as a business owner, you might think you are working for yourself. You could as well be “working” for the society.
