Profit – the first important goal of business

Dr Dhananjay (Jay) Datar is the chairman and managing director of Al Adil Trading.
Dr Dhananjay (Jay) Datar is the chairman and managing director of Al Adil Trading.

Dr Dhananjay (Jay) Datar



Published: Sat 23 Jan 2021, 12:00 PM

Last updated: Sat 23 Jan 2021, 2:05 PM

I frequently give business tips to the youth in my entrepreneurship awareness lectures. In one such lecture, a person asked me to describe the formula of my successful business in a single word. I immediately answered — profit. As everyone was pondering over my reply, I continued, “Yes, every business must be done with the sole aim of earning profit, and that too, ethically.

A profitable business automatically fetches success, expansion and prosperity. Your wealth is judged by how much profit you have in hand rather than how much business volume you have on paper. Though your turnover is as small as Dh10 million and you are earning a handsome profit, you are still more successful than a person having turnover of Dh100 million and a meagre profit.”

I have learnt this wisdom from one of my friends in Dubai. When I was a new entrant in the business field, I lived in an area where my neighbours were small businessmen. They would enjoy business and life equally. Their houses in the vicinity were adorned with modern amenities and posh interiors. They would spend a large portion of their income on food, ornaments and other luxury items.

But what puzzled me was if these traders had small businesses and also their sales turnover was moderate, how did they maintain their comfortable lifestyle? I asked this question to many of them but they seemed reluctant to share their trade secrets with an outsider. Finally after a long time of trust, I was successful in getting the answer from one of them.

He said, “Look, Dhananjay! It is not very difficult to understand. When business is your only source of income, you must earn profit because your family depends on that income. We run our businesses for profit first, luxury and charity comes afterwards. We never let go of the profit even if it is as small as Dh1.

Although our shops are small, we try our hardest to retain the customers by offering them warm and polite treatment and also good service. When such satisfied customers do come again and again, profit steadily increases. Remember — to succeed in business, never lose profit and a customer.”

I started practicing this advice and witnessed the miracle. I humbly tell you that my business always succeeded in maintaining its profitability, even in challenging situations like global recession.

Many businessmen try to impress you by quoting the turnover figures but if asked, no one tells you the net profit. A person’s prosperity can’t be judged merely by their luxurious lifestyle, but by the heaviness of their wallet. I have seen many rich people who boast of possessing villas, cars and diamond jewellery but in reality, a small cheque of Dh5,000 can’t get passed through their account.

Friends, let us remember a quote by famous American automobile executive Lee Iacocca — “In the end, all business operations can be reduced to three words — people, products and profit.”

 

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