There was a time when businesses fulfilled consumer needs. A town along a well traveled road where people often camped would eventually open an Inn to offer those travelers a place to stay. A mining town that was often in need of tools would eventually open a tool / hardware store. A town in a hard to reach area, such as the mountains, would eventually open a shipping company to send and receive resources. All of these businesses satisfy the needs of the customers.
Modern businesses follow guidelines set forth by economist Milton Friedman that say the purpose for a business is to make money. This incredibly flawed way of thinking has led to the downfall of many businesses. Businesses cut corners by using poor quality materials, paying their employees next to nothing, moving their operations to countries with little or no safety regulations, and spending as little as possible in the development of their products. Businesses do not understand their customers, their market, or the people within their own organizations, leading them to introduce poor quality products that fulfill no need whatsoever. The overall result is a complete market saturation of shoddy, poor quality products that nobody wants or needs.
The main reason for this is Milton Friedman’s perspective that everyone so freely adopted. He said that the reason business exist is to make money, and that seemed reasonable. It isn’t true. The reason businesses exist is to fulfill the needs and desires of their consumer base. Marketing propaganda will claim that a company can “create” consumer need and desire, but that’s not really true. Companies can create fads and gimmicks, but genuine need and desire are already there; companies have to tap into it. Sometimes, it takes an innovative product to find a base desire that people never knew they had, like the Apple iPhone. In the end, it’s the needs of the customers that must come first.
Making money is NOT the primary purpose of a business. Fulfilling the needs of the customers is the primary purpose of a business. Making money is an inevitable side effect of doing good business.