Why do companies not always just look at profits

There are several reasons that a company may not look at just profits when they are determining how they are going to operate. The first of these may actually be for business reasons. For example a company may decide that makes more sense to gain market share than to try to maximize profits so they may sell their product for less than the optimal price in order to do this. They may also decide that they need to pay off some of their outstanding debt and use money that would otherwise be profit to do this. These decisions are made with a longer term business strategy in mind, basically you are sacrificing profits today for larger profits down the road.

Another big reason that companies can't just focus on profits is sustainability. This is something that you see all of the time, particularly in industries that use natural resources. A good example of this is the lumber companies, the got so focused on making profits that they cut down all of the trees and many of them ended up going out of business. It is important to make sure that you have a business strategy that is sustainable for the long term and this may well involve giving up some profits.

Businesses also need to make sure that the focus on the community in which the operate and in some cases this may also take some of the focus away from profits. Whether they like it or not companies are a part of the community and it is in their best interest to make sure that the local community remains strong and vibrant. This means doing things like hiring locals, contracting with local vendors and if possible even manufacturing locally. A good example of this is Stanton Optical who run their chain of stores as if each store was a local business. In a lot of ways the focus on community is a part of keeping your business sustainable. After all it is the people in the local community who are your customers, if they can't afford to buy your product your business is not going to survive.

Clearly there are things besides profit that a business has to look at, that being said profit is important and it can't be ignored. It is important for companies to find the middle ground between profit and being good corporate citizens. There is nothing wrong with making money, this is after all why the business was set up in the first place. The problem tends to come when a company takes a short term focus and pays attention only to profits for the next quarter. Taking a long term approach with your business is the best way to find the right balance between profit and sustainability.