I believe in something called the virtuous cycle of a business.

The objective of any business should be to grow.

That is, grow the number of employees, grow the number of jobs, grow product offerings. Then, grow the number of customers.

The marginal revenue of each additional customer is greater than the marginal cost to serve that customer better, over a longer period of time.

You can take that net profit and reinvest it back into the quality of the business by paying employees higher wages, creating more jobs, building a better product and providing more product or service offerings.

When you focus first on improving the quality of the business, more paying customers are a natural byproduct, perpetuating the virtuous cycle.

This is the virtuous cycle of a business.

The alternative to creating a virtuous cycle is focusing entirely on new customer acquisition.

This of course means the pursuit of maximized margins by lowering quality standards, paying employees less while maximizing the volume of work they can produce in any given day.

This creates a perpetual cycle of burnt out employees producing underwhelming products for customers at a lower cost who churn at a higher rate requiring even more efforts to quickly onboard more and more new customers on top of new employees to service those new customers.

This is called the vicious cycle. The vicious cycle will slowly but surely lead to a businesses downfall.

Which will you choose?

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