Article: June Campbell


The Small Business Library

December 19, 2000

Profit at What Cost?
What price are you willing to pay for profit?

I know you are in business to make profit. Me too. But at what cost? Will the business you are building for yourself ultimately make you happy?

I heard recently about a businessman -- a chiropractor, as it turned out, who had a successful practice providing chiropractic services from his home. He enjoyed working with his patients, he enjoyed working from home, had very low overhead, and he was making good money. However, he saw an opportunity to expand. By employing several other chiropractors and by leasing office space in a downtown location, the chiropractor was able to serve more patients and increase his net profit.

Unfortunately, the quality of his life changed dramatically. The chiropractor was no longer able to spend most of his time with patients. He was caught up in administrative tasks, supervising employees and developing marketing strategies to make sure there were enough patients to cover his overhead. Since he now worked downtown, he was faced with a commute time and travel expenses. The overhead increased considerably due to office rent, payroll, expensive marketing campaigns, and so on.

The businessman was working more hours a day than ever before. His stress level increased. And, when he examined his books at year end, he discovered that although his net revenues were much higher than before, his gross income remained the same as it was prior to the expansion. The increased overhead had eaten away at the net profit.

Was it worth it? No. Although some people with a different personality might have thrived in the new environment, this person decided to go back to the simple, more satisfying worklife that he had enjoyed before the expansion. To him, the profit was not worth the price.

I heard another true story about a woman who owned and managed a very successful chain of retail stores. She was an excellent "planner and goal-setter." Her businesses met the revenue goals she set every year and often exceeded projections. Other business people viewed this woman as being outstandingly successful. There was only one problem. She was working herself to the point of exhaustion and illness. Every Christmas, when the stores finally closed on Christmas Eve, this business woman collapsed and essentially slept through most of the holiday season. Spending time with family and friends was not possible. The third Christmas that this happened, the entrepreneur suddenly realized that this was not how she wanted to live her live. She asked herself, "Profit at what cost?" and decided the price she was paying was too high. This woman sold out and opened an entirely new business that allows her a more balanced life.

A third woman, an imaginative, creative web designer, opened a web design business and hired designers to work for her. While she continued to do some web design herself, most of her time was tied up in marketing, administration and supervision. However, the arrangement wasn't satisfying. She found administrative tasks to be boring and unfulfilling. The entrepreneur solved the problem by hiring other people to do marketing and administration, therefore freeing herself up to spend more time on design. She has a vision of winning awards for her work, and the new arrangement will allow her to pursue that goal.

What is your vision? What do you want your business to be like? Is the business you are building right now going to make you happy in the future?

What price will you pay for profit?

If the answers to these questions aren't what you wanted them to be, then perhaps this Holiday season is the time to reflect on your worklife and the direction you want to take in the new year.

June Campbell's writing has appeared in several international print and online publications. Her web site offers a number of resources to small businesses - including guides for proposal writing, business plan development and more.
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