Well, I am assuming that you are either a seasoned entrepreneur or a prospective one. Entrepreneurship is a buzzword these days but most business people out there do not really understand what a business is. We run what we call “a business” but we do lack the understanding of the basics of what makes a business prosper.
I was reading Josh Kaufman’s Book this last weekend, The Personal MBA and found a definition of a business that I have never encountered before. I like his definition due to its simplicity and depth. He says that;
“Roughly defined, a business is a repeatable process that;
- Creates and delivers something of value . . .
- That other people want or need . . .
- At a price, they’re willing to pay . . .
- In a way that satisfies the customer’s needs and expectations . . .
- So that the business brings in enough profit to make it worthwhile for the owners to continue operation.”
The 5 processes above depend on each other and are responsible for the overall success of a business. It is imperative that we as business people learn and master these 5 processes of a business.
Creates and delivers something of value . . .
This refers to VALUE CREATION. Every business should exist to create value. Most ‘hustlers’ tend to avoid this pivotal part of a business. I put it to you that any business that is not creating or adding value to someone is destined to perish. The advert of tender-prenuership (the art of winning or more correctly acquiring valuable tenders) for the sake of money has thinned the idea of the need to create real value as a business. Although for some time a business may prosper without creating some real value, this definitely does not last forever. I implore you to check your hustle, are you creating any value? Are you solving any problems?
That other people want or need . . .
This is MARKETING. Marketing involves attracting attention and building a demand for your product. As a business, you should be in the business of creating attention to your business and your products. Although marketing is about getting attention to your product or service, another important part of marketing is what is known as marketing research. Basically, this involves interrogating the market to check if there is enough demand for your product. You are quizzing the market to determine if it will accept your product in sufficient quantities to warrant your investment in the business.
At a price, they’re willing to pay . . .
This refers to SALES. Sales involve turning your prospective customers into paying customers. The sales process is an art that your business needs to master. The overall quality of your business is determined by the quality of your sales process. You should invest in sales materials, training and optimisation to ensure that more customers buy from your business.
In a way that satisfies the customer’s needs and expectations . . .
VALUE DELIVERY is the process in which your business delivers the service that you promised the customer. Your value delivery process can be a vital tool for your marketing effort. Most businesses forget this to their peril. Some businesses prefer to do the absolute minimum in order to qualify for a payment. This is just wrong. A knowledgeable entrepreneur should ensure that they will deliver their best value to each customer in order to leverage on the Word of Mouth marketing. As a business, check if you are giving your best. Are your workers representing your business in the best way possible?
So that the business brings in enough profit to make it worthwhile for the owners to continue operation…
This refers to FINANCE. Each business should bring enough money to cover costs and also to make the efforts of the business worthwhile. Finance is defined as the science of money management. Each entrepreneur should educate themselves in the art of “counting money”. There are many money management books that one can read in order to learn finance. Do not overly depend on accountants to interpret your “books”. Teach yourself and prosper.
That’s it, folks! Study, study, study. See you in the next article.