Last updated Jul 23, 2024 and written by Tom Richardson

The 5 Components of Business

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As the Made Simple Group is all about, well, making things simple, I was encouraged to pare this post back to basics and come up with what I feel are the five main components of business. Get these right and you should never really go wrong.

A niche idea

The best businesses I’m seeing are those with a niche. They provide a clear product or service to a well-defined audience. Being niche is a route to keep marketing costs low as you know who and where your customers are, and keeping customer loyalty high as those customers can only get what they’re after from you. Refine your niche and you will quickly become an expert in your field, operating on the most lean of costs and optimising sales.

Active business development

Put simply, you are only in business when making sales. Make sales online through powerful platforms such as eBay, Elance and Etsy.com or invest in a template website from providers like Moonfruit, Weebly or Wix. Design your own website and turn browsers into buyers by adding a PayPal button or e-commerce plug-in. Make sales in person through markets, trade shows, PopUps, stockists and channel partners. Keep on top of sales leads and constantly be on the look-out for the next bit of custom!

Good customer service

With custom won, it’s time to deliver on time and budget. Keep customers happy through keeping in contact via social media or a regular newsletter and consider hosting events to connect customers to each other as this will connect them ever closer to you. Address complaints quickly and politely and encourage customers to do the marketing for you by incentivising them to tell their friends and family good things about you too.

An eye on the admin

With sales coming in and payments going out, keep on top of cashflow and the accounts using accounting software or an accountant. When it comes to the accounting side of the business, consider if this is how your time is best spent as you’re likely to conclude it’s better to focus on the thing you do best – which is maybe making sales or creating the product – and outsource finance and management accounts to the experts. Either way, always know what’s in the bank, what’s owed and also what’s owing.

Determination to repeat

Starting and growing a successful business is an exciting journey to make. The highs are the freedom and flexibility that comes with being your own boss and being able to shape a business in your own form and experiment and innovate. The lows are those occasional days when the client doesn’t want to buy, or a project doesn’t work out as planned. What’s most important is that you brush it off, move on, and keep building a profitable venture by following the steps above. It couldn’t be more simple than that!