No matter how a company is structured, when it comes to the private sector, the number one goal is to be profitable. On the surface this may sound overly harsh and callous. Remember, though, there can be a profoundly negative ripple effect when companies are in the red.

If a company is publicly held (more on this later), and is losing money, then there is a real chance that its stock price will suffer. As such, all investors can take a hit to their net worth. If these investors are now worth less, then they might spend less, which in turn may adversely affect other sectors of the economy. Moreover, and regardless if it is public or private, a company in the red might have to rethink its personnel requirements. That is, they could lay off workers, freeze future hiring, or both.