Every business has a profit motive. The goal of any business is to maximize profit and maintain a sustainable business. The profit motive is the most important motivator of business people, and it ensures that businesses stay in existence. It is essential for businesses to develop a service motive, as well. While goods are a basic element of any business, services are an intangible good. Businesses must strive to meet the demands of both their consumers and their employees by providing a service.
Profit is the principal objective of every business
A business’s primary objective is to make profit. Without profit, a business may go under. Profit is the financial reward for taking risks. The profit that a business earns is what keeps it going and helps it to survive and grow. Businessmen have to offer the products or services that people want at a price they can afford. They also have to make money to provide employment to their workers and engage in community service activities.
It is a system of production and exchange of goods and services with a motive to earn profit by satisfying human needs
Businesses are organizations with a motive to make a profit by satisfying the needs of customers and society at large. Producers and distributors work together to create the best possible product, which is usually the basis of the company’s success. The market is the place where buyers and sellers meet to exchange goods and services. In the absence of a market, consumers and producers can only meet at a loss.
It is a measure of success of a business
Every business needs customers. The customer base of a business is an excellent indicator of its success. Its consistency and number of repeat customers can be measured by analyzing its customer base. Customers who have been with a business since the beginning are usually repeat customers, and dropping numbers can mean that a business is losing customers or is losing its quality. Here are some ways to measure the health of a business.
It is a measure of a society’s well-being
Social progress is a way of measuring how well a society functions, and is generally based on examining the quality of the economic system as well as the varied experiences and living conditions of its people. To calculate societal progress, the United Nations developed a new index in 1990 called the Human Development Index. It is based on recommendations from the Commission on Measurement of Economic Performance and Social Progress, and is built around three key components:
It is a measure of a nation’s wealth
The gross national product (GNP) is an economic measure that can be used to compare nations and determine their relative wealth. The GDP includes tangible and intangible assets such as real estate, businesses, automobiles, and tax-deferred retirement accounts. It also includes outstanding liabilities, such as credit card debt and automobile loans. The gross national product is the sum of the assets and liabilities of a nation.