The First Purpose of a Small Business

The first purpose of a small business is to serve the entrepreneur who created it and who owns it. The business may have other purposes: to serve customers and even to serve the community. But before these, the business must serve the entrepreneur.

How does a business serve its owner? Certainly, the business should make money.* Beyond that, the business should make the owner happy: through the nature of what it does, through the things it allows the entrepreneur to do with his or her time, through the daily experiences that the entrepreneur has while running the business.

Every economist understands that if a business doesn’t succeed in its obligation to serve customers, it’s not going to be in business for long. But not everyone remembers that if a business doesn’t succeed in its first obligation to serve the entrepreneur, there’s not much chance that it will keep serving its customers well, and there’s not much point trying.


If the business doesn’t make money, then it isn’t a business, it’s a hobby.  Or at best, an unintentional “nonprofit organization”.

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