Lucrative – What is it, definition and concept

Lucrative is an adjective that refers to an activity that produces profit, that is, that produces a profit or gain for the person who performs it.

Therefore, when we say that something is lucrative, we are saying that the person who carries out said activity does so because he pursues an economic benefit. That is to say, it seeks to profit from that activity by generating a profit.

On the other hand, we say that something is not for profit, or is not a lucrative activity, when the objective pursued in carrying it out is different from obtaining an economic benefit. Since it does not obtain an economic benefit, we cannot say that this activity is lucrative.

In conclusion, lucrative is the adjective that describes those activities that are carried out in order to obtain a benefit or profit.

profit motive

The adjective “lucrative” comes from “profit”. That is, from the expression “for profit”.

This expression is widely used in economics.

When a person carries out an economic activity, we say that it is for profit to describe the objective that, in essence, this person pursues.

If this person is for profit, this person seeks to obtain a profit for the activity carried out. In other words, it seeks to make a profit and obtain a profit for the activity it performs.

Therefore, something is profitable if it is for profit. That is, if it is intended to make a profit.

For-profit sector and non-profit sector

If we already know what it means for something to be for-profit, in the same way that we know what it means to be “for-profit,” it is quite obvious that we have for-profit sectors and non-profit sectors in the economy.

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In other words, we have sectors in which those who operate seek to make money, while we have others, such as the third sector, in which those who operate do not seek profit or profit.

The private sector, in general, tends to be for-profit, since it seeks to profit from the activity it carries out. If he repairs cars, produces jackets, or offers his services as a lawyer, the people who carry out these activities seek a profit for it.

Therefore, we can say that we are talking about lucrative sectors.

However, when we talk about the public sector or the third sector, these sectors are not for profit. That is, they do not seek to obtain a benefit as such.

In the case of the public sector, it is a social benefit, so, in theory, it is not intended to obtain an economic benefit as such.

the third sector

In the case of the third sector, this is clearer.

Thus, we speak of NGOs, foundations or associations that pursue a social benefit and are framed in the “solidarity economy”. For this reason, we cannot say that it is a lucrative sector, since it requires that the organizations that are present in it are not “for-profit”, that is, they do not generate a profit.

Although these organizations generate profits, these are reinvested to develop more activities. Therefore, it is not an economic benefit nor can we say that this activity is lucrative.

loss of profit

Closely related to the concept of “lucrative”, we find the legal concept of “loss of profit”.

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Imagine that we buy a series of objects that we are going to sell and these arrive with damage that forces us to put them on the market at a lower price.

Lost profit refers to profit, that is, the money or profit that the affected agent stops receiving as a result of the loss or damage caused by a third party. These are potential gains that would have been made if the damage had not occurred.

In such a situation, the difference between what could have been obtained and what has actually been obtained is called lost profits.

Example of lucrative

To finish, let’s see a very simple example of a lucrative or for-profit activity.

Let’s imagine that we are economists and we offer our services to companies.

If we like what we do, and we have a job that allows us to live, we can develop this activity without profit. That is, we can not charge for our services and give them away.

However, if we carry out that activity to obtain a profit, a salary, and it is our main activity, we will say that it is a for-profit activity. Since we want to make a profit, we want to profit from the activity, it is a lucrative activity.

And it is that, in essence, we say that something is lucrative when it is expected to obtain a profit from it. In the same way that we say that it is not lucrative when this is not the case, and what is pursued is a social benefit and not a private one.

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