Why a Business Likes Profits and You Should Too

When in business, whether you are running your own or working for a large corporation, there is always talk about profits. A company has to be profitable. Why is that important and on what level? 

You may think the answer is obvious—you are making more money than you are paying out. What does all this mean?  Let’s take a look.

Profits Explained

First we’ll look at it on a simple level. As a company, you cannot spend more than you take in. Now that doesn’t mean if you have a down year you should run for the hills; but over time, you need to be more in the black than the red. Profit not only ensures that you can pay yourself and your employees, as well as your business, it also brings added rewards for your future.

Profit gives you the ability to borrow money. If you are not profitable, banks are not willing to loan you money. One of your most important assets is your people. When you are profitable you can invest in additional personnel as well as keep your current staff happy and advancing. More employees should equal more output which will produce more income which should equal more profits. Being profitable allows you to acquire another business or target new markets. Growth is good.

Profit Margins

It is important to have good profit margins when facing change in any industry. Product changes, additional competition, or even new government policies can eat at your bottom line. You need to be ready to take on what is coming your way.

Thoughts of profit, or no profit, should not be all doom and gloom. You need to put systems in place in order to have your business run efficiently. Certain software or products are available to help you maintain efficiency and ensure that you are being as profitable as possible. Profit is your friend for long-term success.  


In the service business, FieldEdge has you covered when it comes to turning a profit. We offer numerous tools to help increase your profits, efficiency, and consistency.

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