The Greatest Business Principle Ever

Have you ever been asked what's the function of a business? If not, then I'm asking you, "What's the function of a business?" I'm sure many of you said to make profits which is exactly what I said when I was first asked. Well, that's absolutely wrong!

The function of a business is not to make profits, that's the goal of a business. The function of a business is "to get and keep customers." You probably wondering, now why is that the greatest business principle ever. It's greatest business principle ever because if you get the function and the goal confused you go out of business. If you focus on making money, you don't make money. Hence, the reason 95 percent of businesses fail in their first year. However, if you focus on getting and keeping customer, you indirectly make money. By focusing on getting and keeping customers, the goal of the business automatically becomes a byproduct and you make money.

What's the main function of a CEO? To be the leader of the company and ensure that achieves its objectives. It's to get and keep customers! What's the function of a receptionist? To answer the phones and take messages. It's to get and keep customers! What's the function of the accounting department? To ensure the company keeps a positive cashflow. It's to get and keep customers! Now don't get me wrong, all those secondary functions are important. However, by creating a culture that focuses on getting and keeping customers, we hit our goal of the business that is to make profits.

I have seen in my experiences of being in business for the past 5 years, where we gave back customers their money- thousands of dollars! We may have been correct, however, sometimes in order to win the war, we got to lose the battle. It's better to have a positive, memorable experience with your customer where they go spreading that story of joy. In doing so, they bring 10 to probably 100 new customers because of that incident. Remember, that each person knows personally and has a reasonable relationship with 250 persons. When you lost a sale to one person, it's not just one person by them telling their network of friends you lost a sale to probably 250 persons. That's worth thinking about!

The function of a business is not to make profits, that's the goal of a business. The function of a business is to get and keep customers. Here's to building that culture in your business.

Here's To Your Success,
Mikhail Baynes