What is Business?
Business is the bringing together of demand with a product in order to build a benefit stream. The demand can be purchased and the product can be built, purchased or merely sold. As demand transacts to obtain the product, the benefit stream grows. The goal of the businessman is to broaden and deepen the pipeline of demand while improving the product until it is irreplaceable to consumers and moves from discretionary to a necessity. As transactions grow, the division of labor can occur within the business in order to make the ownership of the benefit stream more passive for the owner amounting in an organizational structure. As demand becomes recurring, additional products may be built, bought, or merely sold that are complementary/synergistic to the original. The pattern goes from broadening and deepening the demand pipeline for one product to broadening and deepening the product pipeline itself so that ultimately you have an infinite loop of demand and product bringing the benefit stream to ever increasing valuation.
Business goes through phases of development including:
- Syndication – initially bringing together of demand purchased via Google Adwords or Facebook ads or built via databases cultivated in platforms like Salesgenie.com with the initial product being, purchased or sold.
- Job shop – division of labor initially with owner actively involved in day to day. Initial pipeline of demand and products matched in one off jobs
- Perpetuity – organizational structure takes over fully for the owner. Pipeline of demand becoming recurring in nature.
- Growing perpetuity – pipeline of demand recurring and growing (broadening and deepening demand pipeline)
- Diversified – additional benefit streams built or purchased forming a portfolio.
When thinking about business we have to acknowledge the sources and uses associated with a corporation where sources represent the capital markets and uses represents the asset mix of the corporation. Business can be thought of as a process where the output is a benefit stream with a given level of variability. This benefit stream with a given level of variability is known as a perpetuity. Thus, the model for business is the perpetuity.
Since we know that a perpetuity is the model for business (the integration of industry and the capital markets), we can then build a body of knowledge around the perpetuity which serves as the basis for the science of the perpetuity (Perpetuity Science):
The body of knowledge known as Perpetuity Science can be broken down in the following manner: