The nature of profit

I'm worried that in all of this discussion about the "Big Bailout", the concept and the merits of "profit" get lost.

The problem right now, as I see it, is that we have forgotten what profit means... Profit is not extortion, it is not injust, it is not unfair, it is not evil.

Profit, as I define it, is the value that I add to an exchange, a value that expresses the positive impact that this exchange represents for the client.

In calculus, a branch of mathematics that is the language of physics, each number has a "real" and "imaginary" term. The real term is what we can touch and count, and the imaginary term represents potential. As numbers are manipulated and combined through the equations of physics, the imaginary terms join to become real, and sometime real terms become imaginary. Electricity, magnetism, gravity, quantum mechanics, all these are physical phenomena that can be represented through the calculus of real and imaginary numbers. (for a deeper explanation, see here)

I believe that business is a similar transformational process. As I input or invest the real resources of time, money and effort into my business, I also invest the imaginary, intangible resources of passion, mission, intention, values and trust.

Profit, the value that I add to the exchange, is also represented by "real", tangible, and "imaginary"-intangible terms. The real terms are representable in accounting language: return on investment, increased cash flow, savings and so on. But these real results have to also be balanced through the intangible benefits: how has this transaction helped my client fulfill their potential just a little bit better? To improve the quality of their life? To advance community, nation, humanity, the environment, the planet?

Any business transaction has to generate a value added that is win-win, in the short term as in the long, in the tangible as in the intangible, in the local as in the planet, to you as to me.

When I sacrifice the intangible profit of doing good over the long term just to temporarily increase my tangible dollar results in the short term, the core reason for being of the business starts to rot, and you get the empty shells of the major institutions and corporations that you see today.

Business is about creating a bridge of trust between two people in order to exchange resources of value in order to mutually improve each other's lives. Business is personal, it is is a sacred responsibility. Focus on creating tangible and intangible value that expresses who you truly are, and you will build something that will make a lasting impact on the world.

Irrational commitment

"You can do anything if you have enthusiasm. Enthusiasm is the yeast that makes your hopes rise to the stars. Enthusiasm is the sparkle in your eye. It is the swing of your gait, the grip of your hand, the irresistible surge of your will and your energy to execute your ideas. Enthusiasts are fighters. They have fortitude. They have staying qualities. Enthusiasm is at the bottom of all progress. With it, there is accomplishment. Without it, there are only alibis."
-- Henry Ford

A recent post on my favorite marketing blog by Seth Godin talks about "Irrational commitment".

In this difficult economic period, as storm clouds gather and threaten to discourage people from following their dreams, it is time to be irrational and go against the conventional wisdom. Like the old business maxim "Buy low, sell high" - now, when the business cycle is slowing down, is the best time to launch your vision. In the next 12 to 24 months, you can test ideas, build your systems, create a strong foundation and be ready for the next upswing that will definitely happen.

Make an "irrational commitment" to success - a commitment based on passion and enthusiasm, and it will power you to create the future that you really want...

Free PDF creation and editing tools

More and more I use PDF (Adobe Portable Document Format) to print documents to disk and to send to others. PDF are small, clean (no viruses) and openable by anyone. PDFs provide a clear, well laid-out and somewhat protected way to distribute information and graphics. Here are some free tools to create and edit PDFs:

• Upload your PDF to the site and rearrange pages, combine files, delete pages. Online application, so usable by Windows, Mac or Linux. Handy if you don't have a version of Adobe: PDFHammer: http://www.pdfhammer.com/
  
• And if you are in Windows and you need to generate a PDF, you can do so with other free PDF utilities here http://www.angusj.com/pdftkb/
• Here is an article about the advantages of sending documents as PDF instead of Word:
  http://tinyurl.com/4mf9xn
  

Aim a bit higher

“I always think, 'Just aim a bit higher.' Because even if you fail, you've still landed a little bit higher. Aiming low and not quite making it, that's what I couldn't stand.”
-- Ricky Gervais, Actor (The Office-original UK version, Ghost Town)

As read in Saturday's Globe and Mail

Singing for your supper

During a recent talk I explained the difference between the attitude of an employee and a self-employed person as follows:

As an employee you show up at work, do a good job, get paid and go home.

Imagine that instead, each time you showed up for work, you had to convince your employer to pay you, then you do your job and get paid and go home, having to repeat this each time you show up for work, with no guarantee that your employer will say yes. That is the life of a solopreneur.

To an employee, getting paid is a right.
To a solopreneur, getting paid is a privilege.

Competence is not the same thing as imagination

Competence can be a trap - after all, if you are the best at doing something, why would you risk something new... especially if everyone knows you are the best at it?

Competence is a trap because it can take over how you see the world. Experts in their field see everything around them from the reference point of their expertise, making it harder to think outside the box. "If all you have is a hammer, everything looks like a nail."

In these turbulent times, where every assumption about how the world works is being challenged by facts (economic, social, environmental, scientific, and so on), can you afford to only be competent?

The future is created by those who can see beyond their competence and who are willing to reinvent themselves and the world around them on a constant basis.

In my life, I tend to reinvent myself on a five year cycle (change of careers, change of location, change of language). Each time I had to challenge my own competence and be willing to scrap it in order to build anew. And although it was very painful at first, I think each new version of me and my livelihood comes out the better for it...

What part of your competence are you willing to let go of, in order to learn something new and reinvent who you are?

(inspired by a post by Seth Godin)

A thought about commitment and time

"Commitment is what transforms a promise into reality. It is the words that speak boldly of your intentions. And the actions which speak louder than the words.

It is making the time when there is none. Coming through time after time after time, year after year after year. Commitment is the stuff character is made of; the power to change the face of things. It is the daily triumph of integrity over skepticism."

- Author unknown (often attributed to Abraham Lincoln)

The part that hits me the most: "making the time when there is none..."

My results reflect how I allocate my time, that most precious of non-renewable resources...

You gotta be a bit crazy...

"Go around asking a lot of damfool questions and taking chances. Only through curiosity can we discover opportunities, and only by gambling can we take advantage of them."
-- Clarence Birdseye (1886-1956)
Inventor of the frozen food preservation process

You gotta be a bit crazy to be in business. Entrepreneurship is not logical. If your goal is to make money, there are ways that pay much better and for far longer, than starting your own business. If you want to be your own boss, you'll discover you work for one of the most demanding and least generous ones. If it is stability and balance you are looking for, you will discover that each day throws you a curveball. If it is the freedom you crave, you'll quickly become a slave to the daily demands of keeping your business alive...

Because to succeed in business, you must be able to see things as you want them to be, not as they are, but at the same time, take action based on the reality of the present moment, not reality as you would like it to be. Most of the problems that entrepreneurs endure happen because they reverse their contexts of vision and action, only seeing reality but acting in a dreamworld.

Being an entrepreneur is a lifestyle that I would not trade for anything, not even a lottery jackpot. Reaching for the stars while keeping my feet on the ground, for me it's the only way to grow to my full potential ...

A thought about going back to work

Striving for success without hard work is like trying to harvest where you haven't planted.
--David Bly

Looking at some people's faces yesterday as the traffic jams started again was like seeing zombies. Cheer up! Now that vacation's over, maybe we can get something done! :)

Have a great week

Network Economy Changes The Rules (Toronto Star)

A legal threat in Ontario by a large intercity bus company (Trentway-Wagar) against an internet ride-sharing site (PickupPal) illustrates how the nanoeconomy is disrupting the micro and macro economies:

"the Internet facilitates new modes of production and organization that enable thousands of people to connect, share and work together in ways that were previously limited to larger, well-organized and well-funded companies."

Read the original articles in the Toronto Star:
Bus firm calls online car pool illegal service (Tyler Hamilton, Toronto Star, Aug 21, 2008)
Network economy changes the rules (Opinion, Michael Geist, Toronto Star, Sep 01, 2008)

(link in clear to opinion article: http://www.thestar.com/article/488466)

How could the concept of the nanoeconomy strengthen or weaken your business model?
Even more important... what allowances have you made to evolve what you offer and how you offer it to take advantage of the evolution going on around us, whether we like it or not?