Joseph's "Just My Thoughts"

‘ Capital ’ means ‘ Principal .’ What does ‘Principal’ mean in business ? The ultimate goal of any business is to create wealth. Wealth serves as the foundation for creating value, and that value must be generated solely through production. To produce, the cost must be invested first; the source of that cost is referred to as ‘Principal.’ In other words, the result of a transaction through trading is ‘ revenues ,’ and if costs and expenses are subtracted from sales, what remains is ‘ profit .’ If costs and expenses exceed revenues, it results in a losing trade; if they are lower, it results in a profitable trade. Therefore, principal serves as the benchmark for profitability ; in other words, it is referred to as capital. Whether a business is good or bad is determined by its profitability. If the principal is insufficient, borrowing capital becomes necessary, which is termed “ debt .” Just as the number of principals capable of producing tankers differs from those that can create ...

Peter Drucker stated that marketing is not the same as sales; instead, it aims to make sales unnecessary. He also mentioned that marketing is not just the final step in production but occurs at every stage from beginning to end. Furthermore, a company’s functions can be categorized into marketing and innovation. While sales are vital for generating revenue, it’s crucial to grasp the concept that marketing makes sales redundant. Many companies struggle because they fail to understand this concept and incur losses from unnecessary expenses. - Joseph’s “just my thoughts”

The prerequisite for working is to earn a profit. Profit is defined as revenues minus costs and expenses. In other words, you must incur costs and expenses before you can make sales. Profits arise when sales exceed costs and expenses. If I overlook this straightforward reason, the harder I work, the more I will struggle and negatively impact others. Behind the concept of generating significant revenue lies an oversight of the importance of making a profit. Increased revenue also leads to more significant expenses. The total costs and expenses associated with making sales are referred to as prime costs. Many businesspeople in this world are unaware of prime cost structures and focus solely on boosting sales. - Joseph’s “just my thoughts”

Any business can succeed if it generates more revenue than it incurs in costs. When you achieve high sales volume with low expenses, a surplus occurs; only with a surplus can production and investment continue. “Replication” enables humanity to create surplus legitimately. Humanity has learned that surplus can increase if similar costs are incurred or if goods or services of equal quality are sold at minimal costs. The growth of a management organization demonstrates that it continues to replicate its members at the same level as the founder, and increased revenue indicates it can easily “replicate” the designated quality. The cells in our bodies also “replicate” to sustain life. For handmade products to thrive, they must prioritize scarcity over productivity since improvements in productivity can reduce scarcity. If you don’t grasp the principles of duplication, achieving success in your business becomes challenging. - Joseph’s “just my thoughts”

Receiving an investment signifies that you are receiving a prepayment for future costs and expenses. To generate revenue, you must cover these costs upfront. If you lack the funds necessary to manage current expenses while aiming to raise revenue, you might need to borrow money or attract investments. However, as a recipient of these funds, you cannot use them freely; this money does not belong to you. Legally, your options for utilizing this money are limited: you can either receive it as a salary from your expense account, as a dividend from profits after deductions as a shareholder, or pursue official management incentives. This underscores that the invested funds are not your own. When funds are invested, it implies that profits will be derived from someone else’s money, which you will share with the investor. Although investment alleviates the immediate pressure of expenses, it simultaneously heightens your obligation to generate profits promptly. Being fully funded does not equat...