Western Society is mainly based on Capitalism and Free Market. Entrepreneurs have a relevant role in the daily life of every individual.
New businesses pose an opportunity to create new technologies that solve many problems and satisfy specific necessities, such as the selling and distribution of smartphones, allowing people to have more accessible communication in different parts of the World.
A corporate website for your business is essential for entrepreneurs to attract new customers and promote your services or products.
What is the desire to make money called?
Your main goal as an entrepreneur is to grow your business’s profits, called Profit Motive, which intends to achieve a monetary gain in a specific project and transaction.
Profit Motive can also be considered the real reason a company participates in business activities. People are interested in taking action to help them make money.
The philosopher Adam Smith analysed this concept in The Wealth of Nations, stating that the Profit Motive is the main element encouraging people to trade, truck and barter.
Individuals are incentivised to implement inventions and innovations and take new risks due to the Profit Motive, encouraging people to have an active role in changing and improving society.
How can self-interest benefit society?
Entrepreneurs understand that self-interest is the first factor in motivating your action. Self-interest is considered a sort of engine to drive the larger economy of society and is also a source to direct the moral energy of individuals according to their abilities.
The self-interest of an individual has an impact on helping others and facilitating the environment. In essence, the entrepreneurs’ desires and actions contribute to the evolution and modernisation of the social structure and context.
Adam Smith states that the human behaviour behind self-interest is based on implementing choices that improve the personal income and the well-being of the whole community. Individuals primarily desire to deploy rational decisions in favour of themselves and others.
Key elements of self-interest:
- In the first stage, self-interest is focused on actions eliciting a personal benefit.
- Secondly, companies act under self-interest, producing advantages and wealth for the whole society and economy.
- Lastly, self-interest and competition improve the well being of entrepreneurs and the happiness and prosperity of the rest of the population.
Is the desire to make a profit ethical?
Capitalism, Competition and Free-Market are systems with logic and mechanisms. Building a new business entails a clear and advanced comprehension of human behaviour and psychology.
Profit Motive, in a free-market economy and society, decides who gets what, influencing the efficient distribution of resources and well-being. It is the main driving force behind Capitalism and the Free Market, encouraging companies to come up with new services and products.
It also stimulates corporate innovation, research and development, generating progress and prosperity.
According to various economists, the Profit Motive is the most efficient way to allocate economic resources. Substantially, this entity is the most concrete factor behind the human motivation to carry out changes, innovations, and advancements.
Why is the profit motive important to Capitalism?
The desire to expand your capital is the driving force to implement changes, innovations and transformations. The entrepreneurial spirit significantly impacts the enhancement of society and the whole community.
Profit Motive drives people, encouraging taking risks and ameliorating their skills, imagination and creativity. A Free Market Economy is based on the sense of initiative and the will to concretise changes and new choices. An individual is thus motivated to model the surrounding environment, thereby prospering the community.
Capitalism is an economic system where private entities manage and own properties according to their interests. The balance between demand and supply determines the prices in the market to offer the best services to the whole society, thus the Profit Motive is the most relevant driving force.
Capitalism is based on a system of earnings and losses. The profit reward motivates entrepreneurs to produce what consumers desire most. Inversely, a loss is perceived as a punishment for wasting resources or selling something not functional to the well being of people and society.
Entrepreneurs understand which product or service is more desired by people, then the focus of a successful business is to provide the right goods to satisfy the necessities of the community. The Profit Motive exhorts businessmen to be involved in new deals and take risks.
The Internet represents a new innovative business opportunity. Many pioneering entrepreneurs increased their sales due to their corporate websites and social media pages. If you want to build a successful business, you have to comprehend the importance of the potentialities of the World Wide Web.
What is the precautionary motive of money?
A Free Market Economy encloses multiple aspects elements to build a successful business and beat competitors. The Precautionary Motive of money is the desire to hold cash to deal effectively with unexpected events requiring cash outlay.
It’s well-known that many individuals demand money as a precaution against uncertainties and probable drawbacks. For example, medical and car repair bills are unexpected expenses requiring immediate payment.
The necessity to have available funds during these situations is considered the Precautionary Motive. A similar concept can be applied to Capitalism and Entrepreneurship.
It is essential to have some emergency funds should unexpected issues arise and to face specific problems and drawbacks. If you manage a company, implement the right strategies to balance the revenues and the losses. A provident entrepreneur knows how to handle and run the corporate budget correctly.
The Precautionary Motive infers the need to hold cash to deal with unpredictable obligations, acting as a sort of cushion to cope with unexpected contingencies.
Finance experts recommend having a balanced vision of earnings and expenses. Being too focused on economising can damage your company’s quality and competitiveness, so it is necessary to develop the right wisdom to administer savings.
Managing an online business involves understanding how to optimise your budget. Running an eCommerce store, for example, requires costs such as shipping and purchasing wholesale products. You also have to calculate the profit margin in selling your items to your customers. This compels the right strategies to limit your losses and amass some emergency funds in this context.
Is profit motive good or bad?
Capitalism includes many complex factors and elements. Understanding the fundamentals of the Free Market is essential in building a business. Today there are many different economic and financial theories to follow, having their advantages and disadvantages.
A company looking to expand its profits is a benefit for both entrepreneurs and the environment.
It stimulates people to build efficient businesses, encouraging individuals to improve and enhance their skills and creativity, thereby increasing earnings and enhance the whole community and society.
These issues can increase income inequality in a nation’s economy.
On the other hand, Profit Motive can also be perceived as something wrong. It favours the concentration of solid leadership and wealth in a few people’s hands, contributing to wealth accumulation in a minor part of the whole community.
Profit Motive is positive because it contributes to creating additional value in society.
Different economists believe that profit represents the best financial tool to measure the worth created by an organisation or a company. This system also encourages positive and good relationships among various individuals. Moreover, Macroeconomics exposes that growth and profit are suitable for the community’s well-being.
Profit Motive can be an opposing driving force because it encourages people to earn more money despite illicit and despicable methods. For example, corruption in the corporate system is the consequence of fundamental research of profits and wealth without morality. Additionally, corrupted individuals can damage and erode human relationships.
Taking into account both the positives and negatives, understand that the World Wide Web is the most revolutionary tool for building a new business.
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The will to have more profits has multiple sides and facets. Sometimes, it encourages people to be more innovative, creative and witty. In other cases, it favours illicit actions and the adoption of unethical practices. Money is a central part of our life in a Capitalist society. Western nations are based on a free-market economy. People have to cope with this system and its consequences every day.
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