Posted by: Edward | December 3, 2009

The Business Machine: a nearly universal model of what your business is up to.

This is a system map of the basic components that constitute the world of a business. It abstracts from many on going and single instance interactions a stable pattern of relationship. This can be used for workflow analysis and strategic planning.

The components of the system: the business, the customer, and the vendor

This system map achieves its usefulness by collapsing all of your customers and vendors into the abstraction of the customer and the vendor. It can do that because the relationship between you and all of your customers is structurally the same no matter how different those interactions are at a content level. The same goes with your vendors.

The downstream flow: parts, fulfillment, and deliverables

The customer wants a deliverable, this can be a product or a service. This is something they desire enough to pay someone else to complete it for them. The business takes the parts from the vendor puts them together as a fulfillment the customer’s desire and hands them a deliverable.

The upstream flow: revenue, profit and expenses

Revenue is that money you get from your customers. Expenses is that money you pay to your vendors. Profit is where money leaves the system. Revenue minus Expenses equals profit. Once you have profit you can pay dividends or reinvest it in your business machine.

PS

I can apply this map to analyze almost any business. And will do so for money. Email me at coaching [at] edwardewilson [dot] com with any inquiries.

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