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Old 2012-11-13, 10:04   Link #45
willx
Nyaaan~~
 
 
Join Date: Feb 2006
Age: 40
I agree with the man that disagrees with us all.

1) All companies have owners. A owner can be the proprietor, a common shareholder or a limited partner .. ultimately though there is an owner.
2) That owner will put in the initial capital. This could be leases, working capital, whatever .. money to buy your microwaves, work out maintenance contracts, pay for inventory and the like..
3) That invested capital involves risk. Your business could fail. People might not use your microwaves.. Or maybe your microwaves could break? They might be stolen? You might lose your investment of money and/or time.
4) Because of the risk involved, owners require a return. Maybe it's a coffee shop and they do it so they can be their own boss, so the required return will be very low. Maybe it's a pure profit minded venture. Higher risk. Higher return.

It's not complicated, it's intuitive. Occam's Razor. That's how the economy works.

PS: Facebook's founding principal was "We don't make cool stuff to make money, we make money so we can make more cool stuff" -- and they did abysmally bad at the whole profit making thing .. but the reason why people were so heated up about it was the profit "potential" -- they have no since rejigged how they do advertisements and their focus on earning profits

It is decidedly so
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