[This article is an addendum to the article: To Hate Profits…Is To Not Understand Profits]
It’s human nature to constantly seek profits, while at the same time trying to avoid losses. Every decision that we make, and every action that we take, is intended to improve our life from our perspective. We’re constantly trading our current set of circumstances, for another more desired set of circumstances.
The cost of each action requires (at a minimum) our limited time, and any energy/labor that we have available to expend.
The size of our desires are only a matter of scale. We can have an annoying itch, that requires just a few seconds of time and energy to scratch and relieve, or we can have a desire to express our talents and skills to their fullest and become wealthy as a result. The latter requires much more than just a few seconds of our time. It can take decades to master your craft, and many thousands of hours of expended energy and labor.
Regardless of the scale of our desires, the principles involved in achieving them are exactly the same.
When we succeed in achieving our desires, we experience a psychological profit. When we fail, we experience a psychological loss.
Losses are a result of our inherent ignorance, and lack of understanding the truth.
If you try to scratch an itch by using the palm of your hand, you’re going to be disappointed. The itch won’t go away. You’ll waste your time and energy by doing so. But the moment that you use your fingernail, you succeed, and feel the psychological profit as a result.
Since we have no choice as human individuals but to seek profits and avoid losses, we might as well focus on the BIG profits, right?
Scratching an itch may be profitable, but the satisfaction is fleeting at best.
How can we experience more lasting satisfactions? And can we multiply those lasting satisfactions?
Where are the BIG profits located?
There isn’t a single or ‘right’ answer to these questions. BIG potential profits vary from one person to the next. We all have our own individual desires.
So we each have to identify and locate where our personal BIG profits are located.
Fortunately, the identification is the easy part. Just look for the greatest discomforts in your life. Look for the things that you’d rather not do. Look for the hard stuff….the stuff that hangs over your head day-after-day. You know you have to do it, but you don’t want to, so you don’t.
That’s where the BIG profits are hidden. That’s where you’ll find the biggest satisfactions.
The natural tendency is to avoid these things, and instead focus on scratching little itches all day long. The tendency is to stay busy and ‘get stuff done,’ but it’s usually just run-of-the-mill stuff.
But the greater the discomfort that you relieve, the greater the psychological profit that you’ll experience and the greater the burden that will be lifted off your shoulders.
So, the way to experience and multiply BIG profits, is to identify the things that you have to do that cause you the greatest discomfort. Then do them!
Now let’s take this concept and apply it to monetary profits, since they operate on the same exact principles.
Let’s take the following scenario:
A festival is being planned for thousands of 21-year olds. It’s going to take place out in the middle of a desert. The logistics are terrible, but these kids are pumped. They don’t care.
The festival planner starts soliciting vendors of food and water for the event, which just so happens to be the business that you’re in.
Most vendors go through their cost/profit analysis and they pass. It’s too much of a hassle with transportation, keeping everything cold, etc…etc….
The festival planner calls you, and same exact things that ran through your competitors minds run through yours as well. You really would rather not be bothered with the headaches that this event involves. You already have plenty of run-of-the-mill customers who are easy to supply.
But, because you’ve switched your individual mentality to focusing on satisfying BIG discomforts, you don’t hang up on the festival planner just yet. You put some serious thought into all the contacts that you have and the resources that are at your disposal.
Your competitors didn’t even get that far. They said “No” immediately after considering the difficulty.
But you come to the conclusion that you can make it work. You’ll take the risk, but you’re going to propose that the festival planner pay you handsomely for taking on that risk.
The festival planner doesn’t blink an eye. He takes your offer before you even finish your sentence. No one else would do it! The planner couldn’t be happier.
The whole thing turns out to be a huge success and as a bonus, thousands of kids follow your company’s Instagram account while at the festival. You kept everyone from starving and dehydrating.
There was a HUGE discomfort that you and your company satisfied, and you reaped HUGE profits as a result.
There can be nothing better than the free market! Entrepreneurs using scarce resources to satisfy the most urgent wants of consumers. The more urgent the wants, the bigger the profits (until competition comes in to drive the profits down with an increase in supply). Consumers are showered with what they want most.
But here’s the kicker…
You get home from the successful event to check over the news, and you notice that armchair warriors have started to smear your company:
XYZ Company Exploits Kids At Desert Festival: Greedy Profits For Water & Food
You did what no one else would (or possibly could) so the armchair warriors are more of an annoyance than anything. After all, they’re playing their part too — Ignorance capitalizing on ignorance.
But the kids at the event couldn’t have been happier, and the festival planner has already booked you for next year’s event.
You’ve multiplied the occurrence of BIG profits by tackling the greatest discomforts.