The Basics of Making a Profitable Business
3 min read
Most people confuse business with companies having to employ people out of charity.
Nothing could be further from the truth and that is a parasitic way of thinking done by unconscientious personality types which goes against meritocracy.
Most often DEI supporters.
Their way of thinking is.
"I should get paid regardless of the value I produce".
That includes Dark Tetrad personalities:
Psychopaths
Narcissists
Machiavellian's
Sadists
If you study economics at university you learn that companies exist only to create value for their shareholders.
That value comes from creating value for its customers.
If customers do not feel the product or service has value: they will not enter a relationship where they pay for the product or service.
99,9% of people do not understand the power consumers have with their wallets.
Pareto distribution
Pareto's 80/20 rule states that roughly 80% of all effects come from 20% of all causes. This is a widely proven rule in economics, biology, ethology, and civil engineering. In business Elon Musk proved it when he bought Twitter where he laid off 80% of its staff and still runs perfectly fine.
Labor costs
Employees are the single most expensive cost for any given business and can be up to 70% of total business cost.
Shopify reports that businesses with higher first-year revenue spent more on team costs.
Common sense in business
By combining the 80/20 rule and labor cost statistics it's not hard to understand what the shareholders expect the CEO to do.
It spells "Cut labor costs".
Now that Elon Musk has created a precedent the 80/20 rule applies.
It would be criminal not to cut costs.
This is a feedback loop to the 80% of people not focusing on creating value for the company to start creating value to put themselves into the 20% delivering 80% of all value.
Don't take my word for it.
Listen to Value Entertainment's Patric Bet David speaking to Tom Bilyeu on the Impact Theory podcast.
Most important knowledge - Dark Tetrad personalities
Understanding human cognitive and personality psychology is valuable knowledge when hiring people.
Understanding how humans work can either increase your business value or destroy it.
Hiring one Dark Tetrad personality can destroy all you have built.
All they have to do is be themselves.
Because you do not know what to look for or pay attention to.
The problem is they are extremely manipulative and ordinary people do not think people can be that dishonest.
I am here to tell you they are.
Remember
Business is about creating value for its shareholders
20% of employees create 80% of all value
Labor cost is the biggest cost for any business