The purpose of any business is simply to create and keep customers. Profits are purely a measure of how well the business fulfills its purpose. Any business that fails to operate profitably doesn’t have much of a future to look forward to.
Business organizations are formed whenever one person finds they are no longer able to do everything required themselves. As the founders start to specialize in what they do best, they delegate responsibilities to others – creating jobs and building a capacity to serve more customers.
Customers always act to satisfy their interests at the lowest possible price. Customers always expect the highest possible quality for the lowest possible price.
Customers are willing to pay for quality, so long as it is defined from their own perspective which will embrace everything – the way the product or service is sold, delivered and maintained. Whichever company best manages to deliver high quality is naturally assumed to be the most profitable and secure business around.
Everything ultimately becomes obsolete with the passage of time. Therefore, ongoing innovation and continuous improvement are necessary if you plan on still being in business at any stage in the future. Stay still and you automatically start going backwards.