Asked what a business is, the typical businessman is likely to answer, ” An organisation to make a profit.” The typical economist is likely to give the same answer. The answer is not only false, it is irrelevant.

There is only one valid definition of business purpose: to create a customer.

Profit is the result of having a customer. (The customer buys value & utility & the business provides this.)

Since profits cannot come without a customer, management’s efforts are directed only to that purpose.

(But profits are important for a business- for without profits it will sooner or later be impossible to retain the customer or to get the next customer.

If Gods instead of businessmen sat in director’s chairs, they would still have to be concerned with profitability, despite their total lack of personal interest in making profits.)

Remember: First the customer & then the profits.