The five parts of every business
In one sentence
Every business does five things: create value, market it, sell it, deliver it, and manage the money.
The simple version
Strip away the jargon and every business, from a lemonade stand to Apple, is doing the same five jobs. If any one is missing, the business breaks. It's a handy checklist to spot what you're neglecting.
Why it matters
Founders often love one part (usually making the product) and ignore others (like selling). This shows you the whole picture.
How to do it
- 1Value creation: what do you make or do that people want?
- 2Marketing: how do people find out and get interested?
- 3Sales: how does interest become a paying customer?
- 4Value delivery: how do you give them what they paid for, and keep them happy?
- 5Finance: do you bring in more money than you spend?
- 6Score yourself 1–5 on each and fix the weakest first.
Real-world example
A brilliant baker with no sign, no website and no way to take card payments is great at value creation — and failing at marketing and sales.
What the books say
Every business is fundamentally a collection of five parts: value creation, marketing, sales, value delivery and finance.
Common mistakes
- Only working on the product.
- Ignoring cash until it runs out.
- Treating marketing and sales as the same thing.
Questions people ask
What's the difference between marketing and sales?
Marketing gets attention and interest. Sales turns that interest into a decision to pay.
References
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More books on this in the library
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What They Don't Teach You at Harvard Business School
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Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers
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