Building a Business Vs Making Money

I work as a contractor for an internet marketing company that's currently going through some difficult times. Around 80% of the employees have been laid off over the past three months and prospects for the future are iffy at best. Even though I've only been here a few months myself, it's obvious from my outsider's perspective what brought them to this position - they emphasize making money over building a business.

Although making money and building a business may seem like two sides of the same coin, the emphasis a company (including all the one person companies out there) places on each side of that coin can make the difference between doing well for a few months or doing well for a few years or even decades.

Making money requires little commitment, customer service, or passion. Making money is exploiting some temporary market inefficiency to buy low and sell high. Making money is selling a front-end product for a few dollars then bombarding your new customer with multiple up-sells and sales calls to attempt to get them to buy more before their buyer's high wears off. Making money involves milking a prospect for every dollar they have as soon as you can with little thought to developing a long term relationship with them.

This makes making money a great short term strategy but, as the company I work for is now discovering, a lousy way to build a business.

We have over 200,000 customers who've purchased a product from us. We maintain no long term relationships with those customers beyond the month or so telemarketing barrage we subject them to after they buy. We basically try to get as much money from someone as possible within the shortest amount of time possible then move on to the next prospect.

The problem with this strategy and the issue that has caused the recent firing sprees the owners have undertaken is that we constantly have to be bringing in new customers to make this business model work. Because very little revenue derives from recurring purchases beyond that first month (where we ruin any potential long term relationship we could have with someone by selling them to death) we always have to be looking for new ways to find new prospects and, given our market share, that just isn't as easy as it used to be.

Making money is great but don't confuse it with actually building a business. A business is something tangible that attracts, respects, and retains its customers and, through that ongoing relationship, makes money by providing value to them. A business doesn't have to start from scratch every month because it burned through the prospects it attracted last month. A business doesn't see huge boom and bust cycles that cause periodic massive layoffs.