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Business is the delivery of a value proposition to a customer, client, or end-user. In return, the business will receive the type and amount of value required to sustain the business.
Notice that I use the words, “amount” and “type” of value.
Most of us think of business in terms of money. Ultimately, businesses do require money to sustain operations; but, where the money comes from is based upon the business’s business model.
Let me give you some examples:
- Coffee Shop – This business seeks to sell coffee (and other related items) to a customer.
- Facebook – Facebook provides a free service to individuals. Individuals enter in their personal information to use the platform. Facebook analyzes the user’s activity (combined with the personal information provided) to create target groups for marketing purposes. They then sell add space to individuals who seek to market to these groups.
- Homebuilding Charity – They provide free material and services to individuals who need a new home or need their homes repaired. The individuals receiving the charitable service are grateful.
In the first scenario, the business model is obvious. The coffee shop provides value in the form of coffee. The customer provides value in the form of money.
In the second scenario, Facebook provides value in the form of an online platform. The type of value that the end-user provides is their demographic information and use of the platform. Facebook then takes this value and resells it to third party businesses.
In the third scenario, the non-profit provides value to single individuals. The return value is appreciation and apparent impact on their lives. This evidence of impact allows the charity to reach out to third parties for donation of money, personal time, and other resources.
In all of these scenarios, there is a great deal of activity that must take place in order to deliver value.
This might include: Marketing, Sales, Accounting, Finance, etc.
An entrepreneur, in the process of delivering value, must carry on many of the functions of the business. As a business grows, it becomes too much for a single individual to do all of the tasks. As new people enter the business as employees, they take on specialized tasks. Working in a single function allows an employee to become more efficient and productive in that task. This is how jobs within a business arise.
The business, as part of its operations, realizes that there is value to be added by having another person to carry on a task or function. If adding an employee does not either increase revenue, reduce costs, or decrease the work burden on existing employees, then there is no need for the position.
In separate articles, I write extensively about businesses creating positions that did not previously exist for interns or part-time employees. The business realizes the value that these individuals add to the business’s operations; so, they create a position to keep them on board. An important thing to remember is that a business will (or should) only add employees to the extent that they add value. This reality provides an opportunity for anyone seeking to join a business.
To the extent that you can demonstrate that you will bring value to the operations, you can make an argument that the business should employ you (either as an employee or independent contractor to the business).
Why is this Relevant for a Discussion of Career Development?
There are several reasons:
- It’s important to understand (not just your potential role in a company), but the businesses’s overall value proposition. You should start by breaking the business down to it’s fundamental value delivery. From there it becomes possible to fully understand the organization, structure, and overall strategy. This knowledge will help you determine whether you want to work in the company. You can see our article, Importance of Understanding Jobs and Career Paths for more on this topic.
- When you are networking, you will likely attempt to talk to professionals at the company. The most obvious topic of discussion and point of common interest is the company. Sometimes the fundamentals of the company make the best topics of conversation while networking. Basically, ou need to know the details of what is the ultimate mission and value that the delivers to have this conversation. You can see our article, One-on-One Networking for a discussion of the importance of techniques for successfully networking.
- If you don’t know what they do (or could do) how can you make a compelling case that you can add value. Submitting a job application is nothing more than an attempt to demonstrate to a business that you can add value. Much of this is through your past experience and skills. But, it’s also in how well you can demonstrate your business acumen and abilities. See our article on Writing Resumes for more on how you translate your business acumen into the resume.
Understanding business, whether you went to school or studied on your own, is fundamental to career development within an industry.