5 fundamentals of business and how to exploit them

For most of us the term business brings with it a huge mix of thoughts and ideas. There is a large multitude of theories about how to approach business ranging from the aggressive way of picking up the phone and badgering people until they say yes, to the passive way of letting the word of your business spread from client to client with little effort on your part.

I won’t discuss approaches to how to do your business here, but rather the business in itself.

When you think about it, business is extremely simple.

Business is made up of transactions. Each transaction has some characteristics:

1 – A transaction takes place between two parties

There are only two parties in any transaction. The one who offers the product/service, and the one who acquires it.

A third party is often involved, such as a credit card company, a bank etc. But this would then be a new transaction – again between two parties, one being the one receiving the money, the other the one lending it.

2 – Business is all about exchange

For a transaction to take place something of value needs to be exchanged for another thing of (normally) similar value. Usually a product or service is exchanged for money representing the perceived value.

 

3 – Business is based on self interest

With the risk of sounding like Michael Douglas in Wall Street (“Greed is good”), business is built upon self interest. Any product, any service acquired is acquired to cover a need, a want, a desire.

 

4 – A successful business is of mutual benefit

Imagine having spent huge amounts of time and energy designing the perfect product, only to sell it for way under its value to make the clients satisfied. Not very fulfilling for you.

On the other hand, sell it for a lot more than its value, and your clients won’t be happy, although you probably will.

Balance it out and everybody wins.

5 – Business is based on relationships

Your client is more than just a client for one transaction.

If the client is satisfied, he might just buy again. Or even better, recommend friends and family to get your products.

Do you have any brands you’re faithful to? Are you a Coke-guy or a Pepsi-person? Why? Because you feel a connection with the brand. It appeals to you. It matches your values.

Those are the fundamentals. How does that help you?
Remember that there are only two people in every transaction – you and your client. Hence, design everything based on your ideal client. Accept that one product doesn’t fit everyone, and work with that special client. After all, there are a bunch of people fitting that bill.

Secondly, remember that your business is not about you. It’s about you AND your client. It’s about offering something that will improve your clients’ life, at the same time as improving yours.

Thirdly, remember the relationship with the clients. Take care of them, answer their doubts and concerns, and solve any issue that may arise. Make them feel that you care, and they will keep coming back – with their friends!

Those are my points, now what do you think?

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