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Often in the excitement of starting a business, we forget some of the basic principles we need to keep in mind. Essentially, each business, whether you are selling a product or providing a service, consists of three essential areas.
All of these things are continuously going on, and not necessarily in the order, they are presented here. However, you can’t neglect any one of them, or your business will quickly fail. Keep these three areas continuously in mind as you start and run any business.
Production
This is the stage where most people put their emphasis at least at first. This is the creation of your product or service. For example, if you own a coffee shop, this step consists of sourcing the beans you will use, grinding them, and making them into coffee. It also consists of pouring them into a container to serve them to your customer.
Note that the production process includes the entire process from sourcing inventory until the product is in the customer’s hands. In manufacturing or the creation of goods, it is easy to focus on the creation of the product itself. If you are selling mugs on Etsy, for instance, you might focus on making mugs (the ceramic process) and putting the design on them your customer wants.
However, a part of that process is acquiring the clay or materials to create the mug, the paints to create the designs, and the clear coat to complete it. On the other end, it also includes packaging, boxes, and creating shipping labels.
We all understand that if you don’t have materials you cannot create something, and so inventory is a part of this process as well. When you are providing a service, this is no different. Your inventory is actually your time.
To create more time, you must either outsource some of the things you are doing, or you must hire more people. Just like producing goods, to “produce” more services, you need inventory. You also must include the time to travel to the customer or prepare for interactions. Training is a part of production: it makes you more efficient, and provides your customer with a better “product.”
Just like with the production of goods, automation can help with the production of time as well. Some of your services or your customer interaction can be automated and handled by computers, your website, and even online chat programs that can answer FAQs.
Remember, the production process is everything from the first contact with the customer until they have a product in hand or they are using your service. Neglect any stage of production, and you are in trouble.
Distribution
Once you have created your product, you must distribute it to your customer somehow. There are of course a number of ways you can do this, but this encompasses the entire process from the customer order until they have the product.
Let’s use the coffee shop example above. The distribution process actually starts when the customer walks in the door and waits in line. How long they wait tells you how efficient your distribution process is.
The next step is that they order the coffee. This is how you know exactly what your customer wants, whether that is a simple drip coffee or a cream and sugar filled latte. Once they have told you their needs, a portion of production kicks in: you make the drink they ordered.
The final step is that you pour the drink and hand it to the customer. While a coffee shop is a simplified example, you can apply the same principles to any business, including a service.
Let’s say your business is housecleaning. Distribution starts when you leave the office, and ends when you return. While you are at the customer’s home, you are engaging in a part of the production process: you are cleaning. The way you get there is one part of the distribution.
Online services are the same. Web hosting starts when the customer places their site on your server and ends if and when they leave.
Marketing
The last, but certainly not least, part of the business is marketing. It does no good to have a great production process and streamlined distribution if no one knows about your product or service. The way you help them discover it is through marketing.
While this may seem basic, like production, new businesses often tend to skip steps in this process in an attempt to cut corners. You can’t. Marketing is a long game, and the minute you stop, the minute your sales will suffer.
There are two categories of advertising, and several components in each of them. The first is physical advertising, like signs, posters, ads in a newspaper or magazine, digital signage, or billboards.
The second is digital marketing on the internet.
This includes organic marketing like social media and guest posting and paid advertising like social media and Google ads. This content can consist of blog posts or video content. You can partner with freelancers or companies like Square Ship to create this content for you, or at least to assist you with it. If you find you’re lacking in the strategy department and want to take your business to the next level, invest in a reputable digital marketing agency to help guide your common (and gain the ability to expect results).
All of the types of marketing are viable and should be utilized, but no one form is right for everyone. What will work best for your business depends on what you do.
Each of these areas is very complex, and largely depend on what you do. Every business, no matter what, is made up of these three key areas. Neglect one of them or let them get out of balance, and your business will face issues that can be otherwise avoided.
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About the Author
Victoria Howes is an entrepreneur, traveler, and consultant to multiple brands including Travelocity, Hotels.com, and Homeaway.
