3 It sells a universal product A perfect business sells something everyone

3 it sells a universal product a perfect business

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3. It sells a universal product: A perfect business sells something everyone wants, worldwide. 4. It sells a habit-forming product: A perfect business makes a product that compels the user to purchase it again and again even when money is tight. 5. Its products are cheap to make: A perfect business has very low costs to make the product and the costs go down, not up, over time. 6. Its products are cheap to sell: A perfect business has products that almost sell themselves. 7. It has huge profit margins: A perfect business can sell the product for much more than it costs to make it, and it can keep the profit margins high forever. 8. It can raise its prices with inflation: A perfect business doesn’t concern itself with inflation. If its suppliers raise their prices, it just raises the product price.
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9. Its products and processes make the world a better place: A perfect business cleans up after its manufacturing processes. It doesn’t pollute. It doesn’t take advantage of people to increase profits. And its products make its customers better, more productive, and happier. It doesn’t violate the Golden Rule (i.e., “treat others as you would like to be treated”). 10. Management is owner-oriented, passionate, dedicated, and honest: A perfect business has a management team and, in particular, a CEO who are all about the success of this business for all the stakeholders— investors, employees, suppliers, customers, community. They live and breathe this business. The last thing they would do is take a payday to the detriment of their honor and obligations to the people they lead. That, to me, is the perfect business. I would love to own a business that meets all ten qualities. The only problem is that such a business probably does not, and maybe even cannot, exist in the real world. For instance, isn’t it a logical contradiction to sell an addicting product that makes customers better people? Does it make sense to insist on “addicted” and “Golden Rule” in the same mission statement? The mere fact that the product is habit-forming, like tobacco or alcohol, probably makes customers less in control of their own lives. And are huge profit margins in harmony with not taking advantage of people? Aren’t huge profit margins, by definition, taking advantage? A business with huge profit margins can stay in business quite well even if it sells its product for a lower price, because it will still make a comfortable profit. So does “huge profit margin” violate the Golden Rule, too? Are you doing your best for all your stakeholders, including your customer, by jacking the price as high as you can get away with? And where are we going to find honest managers to run this thing? At Harvard Business School? Not a lot of classes are offered on honesty at HBS or any other B-school, for that matter. And owner-oriented managers? Some professors teach that the shareholders are not the owners. If the CEO doesn’t know who the owners are, then how can he be “owner-oriented”? Most people at these elite business schools have
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  • Spring '20
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