The Five Parts Of Every Business

A business that makes nothing but money is a poor business – Henry Ford

Roughly defined, a business is a repeatable process that

  1. Creates and delivers something of value
  2. That other people want or need
  3. At a price, they are willing to Pay for
  4. In a way that satisfies the customer’s needs and expectations
  5. So that the business brings enough profit to make it worthwhile for the owners to continue operation

Take any of these factors away and you don’t have a business.

A venture that doesn’t create value for others is a hobby. a venture that doesn’t attract attention is a flop. a venture that doesn’t sell the value it creates is a non-profit. a venture that doesn’t deliver what it promises is a scam. a venture that doesn’t bring in enough money to keep operating will eventually close.

At the core, every business is fundamentally a collection of five different interconnected processes, each of which flows into the next.

  1. VALUE CREATION- Discovering what people want or need and then creating them
  2. MARKETING- Attracting attention and creating demand for what you have created
  3. SALES- Turning prospective customers into paying customers
  4. VALUE DELIVERY- Giving your customers what you have promised and ensuring that they are satisfied
  5. FINANCE- Bringing in enough money to keep going and make your effort worthwhile

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