How many experts have told you about the one thing you should do for a successful business? The secret sauce. The golden ticket. The magic formula. If you are anything like me, the number A BAZILLION comes to mind. It seems like everyone and their grandma wants to give you the secret to success.
A successful business is not a get rich quick scheme; it is an intricate puzzle with interlocking pieces. Looking at them one at a time gets you nowhere. The only way to see how they all fit is to take a look at the big picture. And, luckily, the big picture only has five big pieces.
The Five Areas of Business
According to Josh Kaufman in his book Personal MBA, every business is comprised of five areas: Value Creation, Marketing, Sales, Value Delivery and Administrative/Finance. Each area plays an important role in the success of the business and no one area is more important than the other. The five have a symbiotic relationship where pieces of each area work together to make the whole greater than the sum of its parts.
If it isn’t obvious enough, the Value Creation area of business is where you create the value you are providing to your customers. It can be a product, a service, content, expertise, a methodology — you know, the goods.
When first starting in business, it is incredibly easy to get stuck in creation mode. While it is true you do need something to sell, having something to sell alone will not guarantee you are going to sell it. We call this the Field of Dreams fallacy. Just because you build it, doesn’t mean customers will come flying in your door.
Recommended Reading for Value Creation:
Yep, you guessed it. If you build it, you’ve got to market it in order to sell it. This is the area of your business that includes promotion, brand, website, social media, public relations, advertising, and community.
Marketing today is more than just telling everyone how awesome you are and sticking your logo down everyone’s throat — it is about being visible, having a conversation with your audience, and building relationships. It’s not enough nowadays for people to know who you are, they must also trust and like you before they will consider doing business with you.
Recommended Reading for Marketing:
Having something to sell and building relationships with your customers isn’t enough to make your business a success. You have to close the sale. The sales area of your business could include sales staff, sales tools like website, shopping cart, payment processor, etc., and sales pipeline management.
At first, sales may be as simple as making offers on Facebook with a PayPal link. But, as your business matures, so will the sophistication of your sales process.
Recommended Reading for Sales:
Creating the value, promoting it and selling it alone will not give you the keys to success. You must also deliver the value you’ve worked so hard to create, promote and sell. The Value Delivery area of your business includes the programs, systems, and services for enabling your customer to receive that they’ve purchased.
Depending on how you set it up, delivering value can be labor intensive, or completely automated. As your business grows, investing in ways to automate your processes will help you scale and earn more with less effort.
Recommended Reading for Value Delivery:
Admin & Finance
Whether it is because we think it is too complicated or too scary, many entrepreneurs avoid thinking about this area of their business as much as possible. In reality, a business cannot truly be successful without the financial statements to prove it. And, no. It’s not an ego thing “proving” your business is successful. It’s organizations like banks, investors, mortgage companies, insurance agencies, and the government that ask to see the documentation. Having it ready at a moment’s notice is priceless.
3-Day Bookkeeping Challenge and Webinar
Getting caught up and maintaining doesn’t have to be as hard as you are dreading. In fact, we walk you through in 3 simples steps during the free, 3-day Badassery Bookkeeping Challenge.
- DAY ONE: Scrap the paper!! Eliminating and refining receipt storage.
- DAY TWO: Ditch the spreadsheets! How to choose your bookkeeping platform.
- DAY THREE: Help, I’m drowning!!! How to pick a financial expert.
PLUS FREE WEBINAR: Financial Fitness. Building up your Bookkeeping habits for a healthy business and a healthy self.
About the Author
Kathy Rasmussen is the Cofounder and Artistic Director of Badassery Magazine and Co-host of Badassery Podcast. She’s passionate about giving entrepreneurs the tools they need to follow their dreams and live a life of happiness and purpose.
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