Six components of business
These are the six components that make up business. It is important to note that for small business, some of these components may not require much attention.
The marketing component of the business is the key component to ensure the business is bringing in customers and vital for the business to grow. Marketing isn’t just about cost per click or those kinds of metrics that you hear a lot of coming out of marketing agencies. It’s equally as important that there is a strategy for your marketing which then aligns back to the main strategy of the business, the product service mix that you have, capabilities of your staff and the capacity your business has to deliver your product or services.
Human resources deal with the employees of the business, ensuring the business has the right people in the right roles is a big factor to the business succeeding. If the business were to double in size overnight, do you have enough people on staff to handle the extra workload, are there enough people with the right expertise to deliver the product or service and many more questions. It also functions to ensure the business is meeting the applicable legal requirements in relation to employees and the broader workplace.
The finance component of the business entails the financial decisions. This involves bookkeeping and accounting which is vital to be able to make the right decision, at the right time, with the right information available to you. It also functions to pay the bills, collect monies owed from debtors and manage the business bank accounts.
The products and services component may seem quite easy at first but there’s more to it than just having a product or service, there needs to be consideration about whether it’s the right product or service for the business and who are targeting to sell it to – for instance the product at the right price? is it going to be competitive? or with the service do I have the expertise to carry it out? These are just some of the questions that will go into working out your products and service mix to ensure they are correct for your business.
Management & Operations
The management operations component of business comprises of how the business runs essentially, so the flow between one part of the business into the other. An example in a retail setting might be how stock comes into inventory, the procedure from when the storeperson takes delivery of the stock, in goes to the administration to then enter the data into the inventory database, that it ends up on the retail show floor. To the salespeople being aware that it’s now available for sale to your customer. Your operations is what covers that flow how that runs making sure that works smoothly and having the people there to oversee and manage it.
The strategy component of business is an important component as this sets the plan and vision for the whole business, whether that’s to do with the HR in terms of your employees, your marketing, your products and services, your main plan and strategy needs to align throughout the whole business. This would be where you would have a one-page overview of the strategy, but you would also have the in-depth details for each part of the strategy that is created.
Getting all of these components right is the key to a long-term viability and success of a business.