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The Beauty of the Free Enterprise System

Today’s post is by Chad Vorwaller and Randy Russon with TOPCFOS

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Because of the free enterprise system, the choices consumers have today are innumerable. Here’s a great article about the free enterprise system, by Ellis Davidson,

https://smallbusiness.chron.com/explain-enterprise-economic-system-1520.html

Davidson explains, “Economic systems that guarantee the fruits of labor to the people who produce such labor are generally shown to be more productive and create more wealth than economic systems in which the value of labor does not accrue to the person doing the labor, according to “Free Enterprise: The Economics of Cooperation,” published by the Federal Reserve Bank of Dallas. Many countries, including those that do not subscribe to a capitalist economy, have adopted free enterprise principles to grow their economies as quickly as possible.” A Free Enterprise System is at the heart of the American economy.

This type of capitalist system allows individuals to compete both how they wish and for their own personal financial gain. A capitalist economy promotes individual choice and the people can freely choose how they want to spend their money and how they want to earn it. In a Free Enterprise System, people are driven to provide goods or services in a way that will provide themselves with the highest financial reward. Naturally, the competition that this type of system creates drives prices down for the end consumer. Additionally, a Free Enterprise System allows the consumer to choose. Since the customer has the ability to choose and has the ultimate buying power, businesses are forced to be more productive and maximize efficiency since they are required to compete on price. The aforementioned benefits of a capitalist society stimulate economic growth as more individuals seek to become entrepreneurs and business owners.

Since a Free Enterprise System promotes an entrepreneurial society in which competition is rampant, business needs to better understand consumer behavior to stay ahead of the curve. In our type of society, every business must continually ask themselves, “Why would a customer choose my product and service over my top competitors?” As a business seeks to better understand consumer behavior, it can better tailor its product or services to their needs. Steve Jobs famously stated, “some people say, ‘Give the customers what they want’, but that’s not my approach. Our job is to figure out what they are going to want before they do. People don’t know what they want until you show it to them, our task is to read things that are not yet on the page.” Would Apple have become the great company that it is today if the government had strangled Steve Jobs innovative strategy of providing what he believed the customer wanted? America is the land of the free because people are free to tread their own path, whether that brings them success or failure.

We hope you’ve enjoyed our Blog today. Please remember, TOP CFOS offers the finest CFO services to companies anywhere in the world and would love to be a part of your team. Feel free to reach out to us anytime. Your feedback is most welcome, and we invite you to share this post with friends and associates. Our contact information can easily be found here on our website, so give us a call today! Our next post will come from the Risk category on our website and is entitled Business Risk. And, thank you for joining us!