I have always thought that business was an enigma. You?
I maintained a mental model that business was an intricate lattice of failures, products, debt and human capital. Why, because I spent little time in educating myself on how business works. Not to mention the traditional idea that “business is complicated” and its management is best left to the MBAs.
In The Personal MBA: Master the Art of Business, Josh Kaufman explains that business is not complicated at all:
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 or want, then creating it.
- Marketing. Attracting attention and building demand for what you’ve created.
- Sales. Turning prospective customers into paying customers.
- Value Delivery. Giving your customers what you’ve promised and ensuring that they’re satisfied.
- Finance. Bringing in enough money to keep going and make your effort worthwhile.
In essence, the mental model that you have been force fed is a lie. Business is not complicated nor does it require an MBA at the helm. Principally, business is leveraging people and systems in a repeatable process that delivers value for allot of paying customers.
How do you learn about the processes without attending a fancy graduate school, you can start by reading:
- The Personal MBA: Master the Art of Business by Josh Kaufman
- Go It Alone by Bruce Judson
- The Lean Startup by Eric Ries
- Street Smarts by Norm Brodsky & Bo Burlingham
- Ready, Fire, Aim by Michael Masterson
- Escape from Cubicle Nation by Pamela Slim
- Bankable Business Plans by Edward Rogoff
These seven books will give you a fundamental understanding of how to build a profitable business.
Kaufman continues to share:
”Business is not (and has never been) rocket science— it’s simply a process of identifying a problem and finding a way to solve it that benefits both parties. Anyone who tries to make business sound more complicated than this is either trying to impress you or trying to sell you something you don’t need.”
So why isn’t everyone starting a business? Simple, most people don’t have the education on how to make a business profitable. They don’t understand how to create value, market, sell, deliver value and most importantly manage cash flow. If you want to start a business, then you must educate yourself on how to start a business: that is the new mental model.