What are the benefits of a for-profit business model? Well, first of all, the owner of the for-profit business holds personal (or corporate) title to the business and all its assets. Any money that is made by the business can be used according to the discretion of the owner. The owner can borrow against the business, or sell it and keep the profits. When the owner dies, he or she can leave the business and/or its assets to his or her heirs.

For-profit businesses exist not just to support the owner, but also to build wealth. So if you have a business idea that has the potential to build wealth for you, I recommend you stick with the for-profit business model. For example, if you have designed a widget that is apt to revolutionize its market niche, and you hold the patent, by all means produce and sell it through a for-profit business. That widget could make you rich, while offering a great benefit to your customers.

Does this mean that non-profits can't earn money? Not at all. In fact, I always encourage my non-profit clients to look for ways to become self-supporting. Many non-profit agencies generate income through contracting with other organizations to provide services. Other agencies operate businesses such as thrift stores.

The difference is that the income generated by a non-profit organization always belongs to the non-profit agency, not to the organization's founder. If the non-profit organization decides to cease operations, its assets, by law, must be donated to another non-profit agency.

While a non-profit organization may not generate wealth for its founder, a non-profit can be a vehicle that provides a very good ongoing income. Many people create non-profits to do work they love, and to create a job for themselves. The founder of a non-profit organization can become the agency's Executive Director, and draw a salary that is comparable to salaries in the for-profit sector. In some cases, the founder may choose to occupy another staff position, and turn ongoing management over someone else who functions as Executive Director.