What is a business?
So, now comes the question, what exactly is a business?
Remember?
We had defined a business in the Course Guide section as well.
Even if you can't, we will remind you once again.
Our dear friend Josh Kaufman (author of The Personal MBA) has defined a business as:
Any 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
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
operating the business.
As is obvious, we need to integrate Technology, Market and Implementation in the right way
to ensure that we have a successful business consisting of these 5 factors.
Be it any business, a small one or a big one, if you take any of these factors away, then
you don't have a business.
You have something else.
A business that does not create value for others is an invention or a hobby.
A business that does not attract attention is a failure or flop.
A business that is not able to make people pay a price or to sell the value it creates
is a non-profit.
A business that does not deliver what it promises is a scam.
A business that does not earn enough profit will eventually close after some time.
So, every business is fundamentally a collection of 5 interdependent processes:
1) Value Creation: This process involves the discovery of what people need or want.
Once you discover what people need or want, your job is to create it by using the correct
mix of Technology and Implementation.
2) Marketing: This process involves attracting attention and building demand for what you
have created.
3) Sales: This process involves turning prospective customers into paying customers.
4) Value Delivery: This process involves giving your customers what you have promised, ensuring
that they are satisfied.
5) Finance: This process involves bringing in enough money to keep going and making your
effort of running the business worthwhile.
Don't these things sound extremely simple?
It is because they are!
Business never was and hopefully, never will be rocket science.
It is simply a process of identifying a problem and finding a way to solve it in a way
that benefits both the customers and the people running the business.
Now we know what processes to consider when thinking about a business idea.
In the next video, we will be taking up the different forms of value that a business can deliver.
See you!
