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The Only Four Things Any Business Does

8 Jul, 2019 by David Seamans

The Only Four Things That A Business Does

Well, let’s fire the first shot across the bow to all those “experts” out there.

Business is not complex. There are only four things that any business does. Start with FOUR Things in the background

  1. Sells Goods and Services
  2. Gets Paid for Goods and Services
  3. Buys Goods and Services
  4. Pays For Goods and Services

That’s it. Simple. Straightforward.

Hiring Staff is Purchasing Labor, Payroll is Paying for Labor. Table of what goes where

Taxes is only paying rent to the city, state or country. Dividends to shareholders is repaying a loan to a financial institution "roughly".

It is all extremely straight forward.

If nothing else remember the four things a business does. As long as everything continues to flow, the business works fine.

But which of the four is the most important?

Ask yourself,"I am setting up a new business and putting systems into place. Which system should I tackle first?"

If an “expert” came in and started setting up your payroll first, how would you feel?

Hint! Now you know why the business owner feel edgy when the “systems expert” comes in. He started doing everything else BUT set up your invoices and sales processes. It follows that the business owner will be uneasy about any financial advice. The advice does not address the primary issue of making more sales.

Truth is if you do not make sales you have no money to pay for anything and the other issues are irrelevant. As , Peter Drucker (management consultant) said, “Nothing happens until someone sells something.” Critically then, you as the business owner, must focus on every aspect of making sales.

The most important one is “Sells Goods and Services”! WITHOUT DOUBT

But how does one achieve more of the most important thing that a business must do. The business owner must understand the handles of the process and know how to quantify them.

A business coach must work improving cash flow through increasing sales. They can then talk of margins and finally costs.

To do otherwise is to create a communication gap.

The business owner must determine the nature of the business and set direction. This ensures effective sales and related marketing . Without which, nothing else happens in the business.

The business coach must work along side of the business owner.

Bookkeeper / accountant works in the other three areas. monitoring cash outflows and collection, management reporting how monies and compliance.

The challenge is to make the coaching more effective and timely to assist the business owner.

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David Seamans

Co-Founder at Elements, Retired CPA and Company Coach with 35 years of experience building better businesses.