A business is an entity that solves problems. These problems are often solved for other humans and the business entity is often comprised of human being.
Another simple breakdown about what a business from the Personal MBA book is shared below:
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 sufficient profit to make it worthwhile for the owners to continue operation.
It doesn’t matter if you’re running a solo venture or a billion-dollar brand. Take any one of these five factors away, and you don’t have a business — you have something else.
- 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 inevitably close.
At the core, every business is fundamentally a collection of five Interdependent processes, each of which flows into the next:
- Value-Creation. Discovering what people need, want, or could be encouraged to want, then creating it.
- Marketing. Attracting attention and building demand for what you’ve created.
- Sales. Turning prospective customers into paying customers by completing a transaction.
- Value-Delivery. Giving your customers what you’ve promised and ensuring they’re satisfied with the transaction.
- Finance. Bringing in enough money to keep going and make your effort worthwhile.
