Business Anatomy

As we go about rarely do we think of our bodies as different subsystems. We perceive it as one, but when we take a closer look we find that it is actually comprised of different subsystems. We have the respiratory system responsible for breathing, the circulatory system for pumping blood through the whole body, the digestive system to process the food we eat and a whole lot other systems being coordinated by the brain to act as a single unit, the body. Such an analogy can be equated to business. To the outside world a business presents itself as a single front just as the human body and to understand business the units that it consists of have to be explored. At the most basic level we could say business is the practice of selling a product or  a service in anticipation of a profit(money left after deducting taxes and expenses). The end goal of a business is to add value and make money (profit) but before we go there let’s talk about what generally makes up a business:

Product/Service

Before venturing in business, a product or service offering has to be identified. What will the business be selling? If it’s a dairy farm the product will be milk or better yet cheese. If it’s MacDonald’s or KFC then the product would be fast food or takeaways. For services consider banks such as Citigroup that offer banking services to customers. It is important to establish what the product or service is when planning to start a business.

Operations

Operations are described as the processes that have to be performed in order to come up with the product or service. These processes have to be as efficient as possible to save time and money without compromising product or service level quality. Operations usually entail the processing of raw materials into finished goods that become products for selling. Think of a crude oil from Texas, it undergoes distillation and eventually becomes petroleum, aviation fuel, kerosene and other by products required by other industries.

Sales & Marketing

Sales and marketing functions are of paramount importance to the business. These two functions are responsible for getting products and services into the hands of the customers. Efforts in this area are seen by an increase in sales and better revenues reflecting. Revenue is the money earned before expenses and taxes. A business that is serious about getting its products or services out there should invest in clear cut sales and marketing strategies that offer the highest returns possible.

Procurement

This area of the business also known as supply chain management focuses on getting all the raw materials, equipment and other necessities required for the business to operate. Procurement functions need to be performed in record time in order to prevent production stalls in operations because of lack of inputs to use. For example, to make a hamburger, Burger King requires a supply of fresh rolls, beef patties, tomatoes and lettuce. It is the duty of procurement to ensure that all these raw inputs have been ordered in sufficient quantities. 

Inventory/ Stores

The inventory also known as Stores is responsible for recording all stock items purchased by Procurement. They maintain accurate records of information regarding stocks such as total number of items and reorder levels. When materials are delivered from the supplier they are received and accounted for by the inventory clerks/ stores men.

Accounting

The numbers of the entire business operations are crunched in this function. It is responsible for all financial transactions that occur in the lifetime of the business. Accounting provides a detailed position of the business from a financial standpoint. Proper management of revenues (money coming into business before tax and expenses), debtors (people who owe the business money) and creditors (people the business owes money, usually suppliers and service providers) is performed by the accounting function.

Administration

This function is where management mostly falls under. They oversee the entire business operation and consolidate reports from different business functions to come up with a 360 degree picture of the company. This function is also responsible for the strategy and decision making initiatives in the business that eventually cascade to the different functions as directives.

Human Resources

Talent acquisition and retention is handled by the human resources function. It ensures that the business is adequately staffed with people who can handle the job requirements for the business to operate smoothly. The HR function is responsible for the welfare of employees and comes up with programs to ensure employees are motivated and well taken care off.

Legal

The legal function handles all matters with regards to the law and compliance to laws and regulations. A business has to have a legal team that can help it operate in compliance with government laws and regulations.

The above functions are what generally make up the business that we see, admire and love. Now depending on the nature of business and resources all those functions may not apply to you at once but as you scale you may want to consider incorporating them into your structure When these functions work in harmony business becomes a piece of cake.