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8 Essential Parts to a Business (And How They Work Together)

A small business is a system in which all parts contribute to the success or failure of the whole.

In order to build the most successful small business in the world, you must understand that a small business is a system in which all parts contribute to the success or failure of the whole.

Like Henry Ford understood the relationship between the Ford Motor Car and the Ford Motor Company (which manufactures, sells and services the car), you must understand the connection between all the parts in your business and how your company relates to the world.

Here are the essential parts of your business:

1. Consumer

Perhaps you've spent your life working in an industry. You know all about that industry from the inside. But building a business requires going outside. You must consider your customer's needs first and foremost.

2. Competitor

Every customer is being pursued by other companies in competition to yours. They are all making offers to solve the same problem your business solves. Your job is to analyze those solutions, and know how yours is better.

3. Channels of Distribution

There are numerous channels of distribution available to you, but you need to know which ones are most effective for your business. The channels you ultimately choose will determine your reach and your cost.

4. Media

How will you get the word out about your business? You could get on the news by doing something newsworthy, or by buying advertising. Get yourself out there as often as you can.

5. Financial

This involves capitalizing your new venture. Likely, your first steps will be bootstrapping--or financing through yourself and those you know. Down the road, investors may be a possibility, but all the pieces of your business must be running smoothly.

6. Strategic

The strategic part of your business is what happens inside it. They include Strategy, Marketing, Operations and Finance--the four essential functions in your business.

7. Tactical

The tactical aspect of your business overlaps into Marketing, Operations and Finance. This is the execution of the strategy that you have created.

8. Incremental

All the work done by the workers in your business falls into this category. The tactical part lays out the tactics, the incremental part performs them.

Each of these parts must collaborate with the other parts to form a whole. Unless they fit together in a collaborative, highly systematic way, your business will be in chaos. And when it comes to building the most successful small business in the world, chaos simply will not do. That business--the successful one--must grow out of order.

Order calls for symmetry. And symmetry leads to balance. And balance requires consistency. And consistency needs integration. To achieve integration, all parts of your business must fit together, and work together, seamlessly.

Last updated: Mar 18, 2013

MICHAEL E. GERBER | Columnist | Author of The E-Myth

Michael E. Gerber is a true legend in entrepreneurship, helping transform 70,000+ businesses in 145 countries over the past 25 years. Michael?s New York Times best-selling book, The E-Myth Revisited, has sold over 5,000,000 copies.

The opinions expressed here by columnists are their own, not those of

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