Small Business Advice
Is Greed Good?
No drug, not even alcohol, causes the fundamental ills of society. If we’re looking for the source of our troubles, we shouldn’t test people for drugs, we should test them for stupidity, ignorance, greed and love of power.
— P.J. O’Rourke quotes (American political journalist, writer, and humorist)
In the classic movie, Wall Street, Michael Douglas says the immortal line, “Greed is Good!” Clearly his character believed that making money is the most important thing in running a business; however, there are so many other things that must be considered for each and every business.
There have been many studies evaluating why individuals start businesses. Greed or making money in just about each of these studies comes in as reason number three. The first two reasons why people start businesses, which are ranked higher than making money, are control of their own destiny and the ability to leave or create a legacy.
Now please do not think that I am saying that making money for each business is unimportant. After all, if you do not have money and cash-flow, your business just is not going to be around too long. However, while making money is important, there are so many factors that each and every entrepreneur must consider.
One firm gives 50% of its profit back to its employees. Does it have to do this? Of course, the answer is no. They give this money to the employees as they want to share some of their wealth. Clearly these owners feel as if greed comes second to the need of their staff.
A final advantage of gift certificates is that they are very easy to manage. However, in the case that you decide that you do not want to handle them yourself, there many firms that will manage the service for you at a very low cost.
By far the one thing that I see over and over are businesses that recognize that the community in which they operate in, need to be supported both with finances and managerial assistance. Our communities just would not be the same if entrepreneurs did not step in with their pocket books and volunteer time. This just does not offer a return on investment but it does make the community a much better place.
If you think about a business, there are many stakeholders including employees, vendors, customers, communities and owners. All of these stakeholders must be taken into account in the context of the entire firm and not just making more money.
Greed has to be, also, taken in context, in the sense, of long-term or short-term. Maximizing of short-term greed does not necessarily mean that you are maximizing the long term value or profits of a company.
I was assisting an entrepreneur 2 years ago who wanted to sell his business. He thought that it was worth so much that when he received reasonable offers on his business, he just passed on these as they were too low for him. Six months ago this same entrepreneur had to give away his business as could not now find a buyer at any price. In this case pure greed and unreasonable expectations caused him to loose over a million dollars.
While making money is so critical for each and every firm, there are so many other things that need to be evaluated in these decisions.
Now go out and make sure that you are serving all the stakeholders in your business and not just the financial ones. You can do this!.
You can do it!
Jerry Osteryoung is the Jim Moran Professor of Entrepreneurship in the College of Business at Florida State University. He is also the Director of the Entrepreneurship Program at FSU and Executive Director of the Jim Moran Institute of Global Entrepreneurship. He can be reached by e-mail at firstname.lastname@example.org or by phone at 850-644-3372.