The Fundamental Principle of Business

When you think of a business, what generally comes to mind?

Let us start with the typical layman’s idea of business.

A business is something someone sets up to make money. Put it another way; Making a profit is what business is all about.?A business can be a store, an office, a restaurant, an individual providing a service, a manufacturing operation, the latter is often called a company.” ?In other words, a business is a means of earning a living, either as the owner or an employee.

Business vs Company: Though they both have to do with providing income in the form of jobs, products and services, a Company can be a big organization consisting of dozens, hundreds, or even thousands of people, mostly as employees.?Not all companies are big. Some consulting engineers call their firm a company, particularly if their firm is a C or S Corp, or anything other than a sole proprietorship.

So what does a business actually do??What defines a business in terms of how it operates??How does a business function??What do all businesses have in common as to what they do??How should someone look at anything you could call a business?

We must first consider relationships between businesses and their customers.

The keyword being “relationship.” A lot of business operators believe business is all about building relationships.?Many businesses are dependent on a so-called “customer base.” Typical examples of such would be auto repair shops and hair salons.?These businesses thrive if there are so many people who will need their services every so often.?You just need to give them good, honest service to keep them coming back.

The ”relationship principle” does not apply with every business.?What about a restaurant or convenient store located aside an Interstate Highway??

Customers are mostly one-time diners or shoppers who so happen to be passing by.?A relationship would be a more loosely applied term, to travelers who regularly go this route who want a good place to eat.

So what goes on at any business no matter what market it serves?

It’s what many business operators call a transaction.?When someone buys something at a store or shop, when a diner orders a meal, when somebody gets his hair cut, when work is done on an automobile… whenever somebody pays money for something, be it a product or service, a transaction has taken place.

What exactly is a transaction?

A transaction is the exchange of money for something of equal value in terms of worth. Something of equal value could be an item of merchandise or an act of service. Now value is the keyword at this stage. Many businesspeople define money as “stored value.”?Stored value is?something that can be exchanged for something of real value, like a quantity of a foodstuff, or a pair of shoes, or so many kilowatt-hours of electricity.

So here we have it, what is common to all businesses, whether it’s goods or services. A business is an entity that operates on exchanges of value. So much money for so much time performing a specific task. The basis of pay for someone working at a factory. The cost per mile to transport a certain volume or weight of goods.

Exchange of value as perceived by the customer or client is what defines a business. Not all value exchanges have to do with money. In operating a business online one of the objectives is to build a mailing list. Such a list consists of a name (first or first and last) and that person’s email address. Some lists have telephone numbers and job titles.

How emailing lists are built is by placing an online ad, either space ad, banner or ppc, offering a free eBook or special report.?The free literature is downloadable, usually a pdf, and is on a topic of great interest to specific readers, thus having a high perceived value.

Clicking on the ad displays a form where you enter your name and email address. When you click the submit button you will be sent an email containing the download link to the eBook. Also on submitting your name and email, a Thank You page will be displayed advising you to check your email in a few minutes.

From generating revenue to promoting the business, the fundamental value exchange principle is what makes the business work.

If you would like me to analyze your business in terms of effectively written copy and any other marketing issue, visit me on https://www.francisardi.com/contact-me/ .