Thursday, June 18, 2009

NO BUSINESS LIKE NO BUSINESS

Famous brand new old saying: There are two kinds of people in this world: those who think there are two kinds of people in this world and those who don't.

There are two basic kinds of businesses in this world: For Profit and Non-Profit (There is also a subtly different Not-For-Profit).

In a Non-Profit business, the business entity is not expected to make a profit.

That seems obvious, but what does it mean?

A Non-Profit business is a group, often a corporation, organized for purposes other than generating profits; for example, a charitable, educational, religious, or scientific organization. Certification by the IRS or Franchise Tax Board is a common attribute.

(Not-For-Profit businesses are very similar to Non-Profits. A Not-For-Profit is an organization that may or may not be a "business" in the sense that we usually think of one. It is one that channels any funds remaining after paying operating expenses back into programs and services rather than sharing profits with owners, shareholders and executives.)

A For-Profit business is one in which the total income or cash flow minus expenditures represents the value of the company to its owners and/or investors. Profit is the money or other benefit a non-governmental organization or individual receives in exchange for products and services sold at a given price.

A For-Profit business is not spooky.

Subtract from your incoming cash all of your business expenses and the difference is your profit.

Here is how you accomplish running a For-Profit business.

Find a product or service that people want.

Sell each unit of product or service for more than it's landed cost (the cost per unit of obtaining, displaying, maintaining and selling the product), and voila! You have a profit.

I have never heard of anyone going into business for any reason other than to make a profit (and here I am not talking about altruistic endeavors like churches, food banks, educational entities, etc.).

For-Profit business, in and of itself, is not evil. Dan Cathy, current CEO of Chick-Fil-A, spends millions of company income on education and other community and national endeavors, tons of bucks on its employees, is closed on Sundays and still makes a very handsome profit...one that keeps its family and investors very happy.

But what happens when the government decides to run a business, as ours has General Motors?

First of all, by law the government cannot make a profit.

Since is is supposed to represent the citizenry, the government goes to great lengths to ensure that it is getting the best value for taxpayer money that it can.

That's the theory.

John Glenn was once asked whether he was nervous before blasting off into space. He replied, "Wouldn't you be nervous sitting atop a potential bomb each piece of which was put together by the low bidder in a government contract?"

In practice, the government often does not accept low bids if, among the bidders, there are those who have done favors for or who owe favors to members of Congress or the Executive branch.

But the government is still not supposed to make a profit on its endeavors.

Since it has no experience with, expertise in or history of running businesses, what makes them think they can run a financial institution or a production business?

Does the government intend to continue allowing General Motors to operate at a profit?

How does the government (read: President BO and Congress) think closing hundreds of dealerships helps save those 100,000 jobs it promised to save?

What about financial institutions?

Why will we trust the government to do for banks, insurance companies and investment houses what it cannot do for itself?

Have you seen the General Accounting Office reports lately?

The way government "leaders" think is, "If we are failing, all we have to do is more of what we're failing at and it is bound to turn around."

Pretty soon, the government will have to find more businesses to help fail. Otherwise, why would the government continue to exist?

Eventually, there will be no more businesses to kill.

We'll be singing:

"THERE'S NO BUSINESS LIKE NO BUSINESS"

2 comments:

Mustang said...

Apparently, in describing the so-called “for profit” businesses, you mean individuals who have the arrogance to assume that they have a right to other people’s money by transforming natural resources into products that are made and distributed to retailers, who often resort to clandestine marketing schemes, even to the extent of offering returns or swaps for defective merchandise. Now all of this is obviously an anti-government plot to bankrupt the morality of the American people, but also government’s treasury and monopoly. To me, this means that the Department of Homeland Security is not doing enough to curtail these right-wing extremists, nor acting sufficiently to redistribute wealth to those who are not working.

Heil Obama!

Joe said...

Mustang: Exactly!