The Business Edge Blog

February 5, 2013

Every Business – 5 Key Parts

5 parts of a business“A business is a repeatable process that makes money.  Everything else is a hobby.” – Paul Freet

Josh Kaufman in The Personal MBA provides the following definition of a business.  It is a repeatable process that:

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

At the core, every business is fundamentally a collection of five interdependent processes, each of which flows into the next:

1.  Value creation – discovering what people need or want, then creating it.
2.  Marketing – attracting attention and building demand for what you’ve created.
3.  Sales – turning prospective customers into paying customers.
4.  Value Delivery – giving your customers what you’ve promised and ensuring that they’re satisfied.
5.  Finance – bringing in enough money to keep going and make your effort worthwhile.

If you take away any one of these five parts, it’s not a valid business any longer.

When planning a new business or analyzing an existing venture, always begin with a review of the five parts – they will help you discover any major issues or gaps quickly.

______________________________

If you can master the concept of these processes, you’ll be well on your way to being ready to present your business to potential investors, bankers, mentors or your board of directors.

Questions for Consideration:

Think about the business you’re in:

  • What are the five core processes?
  • Can you describe or diagram them in detail?
  • How do they fit together?
  • Where do you need help?

Please share the five core processes in your business using the Comments section below. I look forward to hearing from you.

Until next time – Remember to mind your business!

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2 Comments »

  1. Great post Holly! Simple and succinct! Thanks for the info. Blessings, Kurt.

    Comment by Kurt A Berry — February 5, 2013 @ 10:09 am | Reply

  2. Nice, this is indeed very simple.

    Comment by themantisshrimp — August 1, 2013 @ 3:04 pm | Reply


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