Make a profit or make a contribution?

Feb 9, 2022 | Insights

Home » Insights » Make a profit or make a contribution?

The distinction between contribution led and demand led businesses is nuanced and essential for anyone seeking meaning by making a difference.
Kim runs a website design business out of Wheaton, Illinois. Last week, she was asked to present to her local business networking group. Glad to help, she sent a summary to her host for pre-event publicity, including the following short bio:

“….has been helping aspiring freelancers and entrepreneurs build an online presence that fits who they are and what they want to contribute to the world.”

Her host re-wrote the sentence and sent back:

“…has been helping aspiring freelancers and entrepreneurs build an online presence that fits who they are and what their small business delivers in meeting its customer demands.”

Contribution as an essential principle.

Kim felt that the change sucked away something essential about her approach to business. So, with a principle at stake, she successfully asked her host to re-instate the original wording.

In Kim’s words, ‘This all just points out the misalignment I feel with much ‘common wisdom’ of business’.

Running a business is an effective way of making a difference and adding meaning to your life and the lives of others. And yes, business needs to make a profit to survive and thrive.

Customer demand or contribution

So, what’s the issue here? Arguably, the customer demand model implies a focus on metrics, management and the results of profitably selling a product or service to a customer for a payment.

In contrast, the contribution model implies a more human approach to business, one in which you offer your skills, talents, and resources to make a difference to others.

Kim describes her clients as the ‘beating hearts that long to be cared for and loved and listened to’. By adopting the ‘contribution’ model of business, she recognises the humanity of her clients.

Can the contribution model work?

Business gurus may froth at the mouth at making a contribution rather than a profit the primary driver of a business. However, young companies such as Gravitricity (energy storage), what3words (navigation) and Catipilla (cat furniture)*, to name a few, all seem to have a significant focus on making a contribution.

It does not mean to say these companies cannot make a profit. Indeed, the longer-term profit (and growth) potential is probably more significant for these businesses than customer demand-focused businesses.

The distinction between customer demand and contribution-focused businesses is nuanced and essential for anyone seeking to bring meaning to their lives by making a difference to others.

* In the interests of full disclosure, please be aware the author owns shares in these three companies amounting to less than 1% of the total issued shares. The author has no controlling interest in these companies.

Photo by USGS on Unsplash

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