Inspired by Josh Kaufman, author of business classic: “The Personal MBA”, there are 5 keys that are critical to any business success. These are the parts that must come together to make a successful business, just like the foundations of a building. These are the 5 Foundations of Business:
A business that fails to create value for people to buy is a hobby
A business that fails at marketing is a flop
A business that fails at selling the value it creates is a nonprofit
A business that fails to deliver value is a scam
And a business that fails at Finance will closeJosh Kaufman
Josh Kaufman breaks down business into 5 parts and makes it easy for people without business MBAs to understand and master the foundations of Business Success. We’ll discuss this in the following paragraphs.
Businesses must create what people will value and buy. The first stage for every successful business is problem recognition. We can further add that when evaluating alternatives, customers look for convenience and emotional impact.
You can create more value by offering a convenient service: can you perform quicker, reliable easy, or more flexible than the competition. Can you create products with emotional impact, that makes people feel special, with a perceived higher social status? These are questions that could unlock a gold mine.
This is how well you can capture and hold attention. We’ve talked a lot about marketing in recent weeks. The Purple cow effect is really what marketing is about, says Josh.
When passing through a farm with white cows, sighting a Purple cow will definitely draw your attention. A business that fails to do this is a flop.
Kaufman talks about believe and trust. For customers to exchange their hard-earned money with your product, they need to trust and believe you. In this situation, there’s only two ways out:
Social proof – people like to see others testify about your product before they buy. If their friends or family or their favourite celebrities talk about your product, they’re more willing to buy
Consistency is the other way out. You have to consistently produce great value for customers to trust your brand. More trust, more sales.
The question of value delivery is how well your brand is exceeding customer expectations. Customers generally have high expectations. Your ability to meet/exceed these expectations ultimately leads to satisfied customers, and awesome brand testimonials.
A business that fails to deliver the value it promises is a scam to the customer. When people say it’s a scam, this is a clear picture of what they really mean. They’re not simply getting the value they’re expecting.
The importance of finance in business is critical. A business that fails at Finance will close. This is a law.
Finance simply means: are you making more money than you’re spending? If otherwise, you need to cut down costs, and make additional efforts to increase productivity. The goal of business finance is to reduce costs and maximize profits.
Kaufman’s insight into the foundations or parts of business success presents an interesting perspective on how we can all organise our business ventures for success. Understanding these five essential parts of business and focusing on their efficiency can help us create better products and better business success.
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