by Margaret Heffernan - Thursday, 6th September 2007 -

But you will be making a profit, won’t you?” the interviewer asked.

What I remember most about his line wasn’t the innocuous question; it was the sneer in the radio reporter’s voice. A profit. He made it sound like a really dirty word.

Anytime you venture outside the safety of the financial pages of national newspapers, you encounter a very strange attitude in Britain towards business in general and profits in particular.

Shareholding readers of the financial pages understand that profits make them rich. But consumers think that profits cost them.

It stands to reason, they’ll argue, that if the company is making a profit, they must be ripping off the workers and they’re ripping off me, the customer.

Profits, therefore, must be the source of all evil. It is but a small step from that attitude to the belief that therefore all commerce must be, basically, bad.

They need to be better informed. Companies make profits because otherwise they would die. If you sold your products or services at only the cost price (even taking into account wages, overhead, and tax) you wouldn’t survive.

Where would the money for new product development come from? How would you dare risk opening a second office? Who would contemplate upgrading their IT infrastructure?

If you were running a shop, how could you finance introducing a new range of items? How can a services business take on and train new talent, knowing they won’t earn their keep for several months at least?

Individuals and companies who strangle profits often think they’re being sharp businessmen, tough negotiators. They aren’t. They’re just demonstrating their ignorance of what should be the golden rule for entrepreneurs: profits drive innovation.

Of course I understand that there are companies whose profits appear so gross, and their executive pay so excessive, that they drag the whole concept into disrepute.

I deplore them not just for being greedy but because they provide fodder for bad thinking, for an attitude to commerce that damages us as an economy and as a nation.

Because if we want to think seriously about sustainability – and I’d argue it is the key metric for all business today – then we’d better start thinking intelligently about profit.

Independent television production companies face this issue all the time. Indies were born when Channel 4 started and when the BBC and ITV were mandated to outsource at least 25 per cent of their output to independent programme suppliers.

This deregulation was designed to create a competitive market – and it did. But what the legislation, and subsequent Terms of Trade between broadcasters and producers, didn’t do was give the broadcasters any business understanding.

What this means is that viewers get shows – but many companies that supply them aren’t paid enough to be profitable. The BBC and ITV both have the gall to claim this represents value for money. It doesn’t. It represents ignorance.

Some of the bigger producers generate profit through selling “formats” – quiz programmes, reality shows and their ilk – to the US. Some sitcoms can travel.

But the shows that can’t do this – documentaries, dramas that are about the real world, and that rare species, the intelligent business programme – aren’t making money.

Instead, they’re made on a shoestring, subsidised by committed people who put in hours of effort that are never paid for. Companies that work like this – and there are many – don’t make big enough profits to grow. They’re an endangered species.

And it’s not just television. I’m puzzled when I hear people brag about how aggressively they negotiated down a bill.

They seem to feel they’ve won something – but, when that plumber or craftsman isn’t there next year, they may think again. And it amuses me to watch how hot under the collar consumers get about fair trade.

They want – quite rightly – to feel confident that the workers who pick their cocoa beans are being paid at liveable, sustainable rates. They want a clear conscience when they drink their lattes. But what about fair trade for companies in the UK?

A company that can’t afford to pay its staff a decent wage certainly can’t afford to make a profit. I know too many businesses that are subsidised by owners who have no idea of how they will ever retire.

And I know too many businesses bursting with great ideas they can never execute.

If we are serious about wanting to make Britain more innovative and more entrepreneurial, then we all need to stop apologising for profits and start explaining why fair trade begins at home.