A World-Class Business Education in a Single Volume
Master the Art of Business
2nd Edition, Revised & Expanded
The Five Parts of Every Business
“A business is a repeatable process that makes money. Everything else is a hobby.” — Paul Freet, serial entrepreneur and commercialization expert
- 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’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.
- Take away any one of these five parts, and it’s not a business.
- When planning a new business or analyzing an existing venture, always begin with the five parts – they will help you discover any major issues or gaps quickly.
Questions for Consideration:
- Think of the business you’re working on: what are the five core processes?
- Can you describe or diagram them in detail?
- How do they fit together?
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