Business Basics - The 3 Fundamental Functions of Every Business Explained

No matter what type of business, or organization for that matter, you can rest assured that there are three fundamental functions that run that business and dictate how that business behaves.

This post explains the 3 basic functions of every business. These functions are Finance, Marketing, and Operations.


The 3 Basic Business Functions

Finance

The finance function of a business is responsible for securing and distributing funds for operations.

This function also is typically in charge of purchasing goods, supplies, and services that are necessary to carry out marketing and operational activities.

Budgeting and forecasting expenses, revenue, profits, costs, losses and debt are crucial tasks  that the finance function of any business must be able to perform successfully.

Managing cash flow and the financial assets of a company is no easy task. To stay competitive a business must be able to manage their money effectively. This could mean developing investment strategies that produce a significant short term yield with out taking on excess risk.

Some businesses owe their success in large part to their finance department. For instance Amazon.com originally made their money not by selling books but by simply investing sales revenues for the short term between the time of purchase and the time of payment to the seller. During that period which was a time frame of 30 - 60 days for any given transaction Amazon.com invested the money for the short term and "made their living" off the investments resulting return or yield.

Most people don't know that.

Marketing

The marketing function of a business is ultimately responsible for ensuring the business has customers. The marketing activities and efforts of a company must focus on ensuring that the products and or services of the business are able to meet the needs and wants of the customer. Perhaps just as important, the marketing department must ensure that the target market is aware that the companies goods and services, and further, are aware that the products are able to meet their needs and wants. This "awareness" must be strong enough to convince an acceptable portion of the target market to purchase the goods or services as a means to meet their needs and wants.

The marketing side of a business must focus on developing strategies and plans that effectively create this awareness. For instance how a company advertises their products and services is developed and executed by the marketing department. Much of the customer experience is a focus of marketing. Whether it be designing a strategy to cross sell candy and other tasty treats to customers at a video rental store such as Block Buster or creating an overwhelmingly positive emotional experience for those touring a time share resort the marketing function of a business attempts to create a consumer experience that is optimized for selling the products and services of a business.

Just as the finance department will create forecasts and budgets a marketing department will prepare a marketing plan which forecasts sales and more importantly acts as the blue print of how a company will entice customers to purchase a firms products and services.


Operations

Operations is the function of a business that is responsible for cresting the goods and services of a business. Operations is responsible for producing what the company sells with in the boundaries of the budgets and forecasts supplied by the finance department as well as the supply and demand forecasts of determined by the marketing department. Operations must  produce products and services in line with what the marketing department has dictated is necessary to meet the needs and wants of the consumer.

Operations is also the biggest player in running and managing the supply chain. Supply chain management is a crucial aspect of any business and the proper operations management approach can make or break a business. For instance despite Block Buster having multiple times the amounts of revenue as Red Box, Red Box stock is selling for extremely high multiples of their earnings per share while Block Buster is in bankruptcy trying to restructure their debt. This is because Red Box has a lean and mean well managed supply chain and Block Buster is still working on optimizing a clunky retail cross selling approach.

Just as a side note Red Box is owned and managed by the same folks who manage coin star.

So there you have it folks the three basic functions of any business explained. If you like reading about this kind of stuff I have decided to do another post directly relating to this topic. As a way to better explain and see the concepts at work I am going to post how each of these fundamental business operations relate to this very finance blog. This should give folks a practical application of the fundamentals at work by using Young Finance Guy as an example.

Summer Block Buster Does it Right - Cameron and Tom Light It Up

So I have for a while now lost faith in the big screen. It just seemed that it was all about the quick money and not so much about the movie. The producers spend big on advertising and marketing talent and almost nothing on movie making talent. I hate that trend.

However I am glad to share that the action packed blockbuster known as "Knight and Day" has reawakened my soft side for shelling out $10.00 for a flick.

Mrs. Diaz was awesome and cruise was cool too. These guys really pulled it off together.

C. Diaz in small silver sexy bikini bottom

In fact the only true blockbuster in my opinion was Dark Knight. That was a hit and it was a hit because of that Joker. Damn if he wasn't absolutely brilliant in every imaginable meaning of the word. Shame that brilliance was snatched away in his passing. The whole situation kinda reminded me of the Crow.

Any how... Back on topic.

The alluring gaze of C. Diaz

Their are to many disappointments over the last few years to really dwell on.


So Cameron Diaz, my one wish if i was ever granted one. She was absolutely perfect in this action stuffed, meat and potatoes of a movie.

Tom Cruise and Cameron Diaz on a Motorcycle

Why this thing is not being celebrated by everyone at this very moment is beyond me. I sure hope it is not because of old Tom Cruise who did a freaking wonderful job as always. I swear just cause the guy went crazy hyper on the Oprah Winfrey show and happens to like that damn church of Scientology doesn't mean he still can't make a dime a dozen script into one of the best most exciting and exhilarating feature flicks that you have seen since he came out with his last one.

I mean honestly does the guy make a bad movie? Has he ever? then show some freaking respect and get off the damn computer grab your kids and take them to that movie... do it know!

This thing between Cameron and Tom was magical. I mean I still am not over it. They were thrilling, sexy, heart breaking, outrageously funny, and refreshingly entertaining. Both of them. Separate, together, and in commute these guys were unstoppable.

The first scene on the plane was a crazy emotional roller coaster like no other opening i have ever seen.

You first are taken with Mrs. Diaz and her alluring innocence, and Tom brings you to this philosophical state. Then out of no where this looming paranoia, followed by action packed jolt that was over before it began. then Diaz leaves and separates so that now your attention is thrown back and forth between an oblivious and ever lovable Diaz which would have been funny too except that Tom stole the show in this bizarre comedy action packed scene in which by the time it was over everyone in the freaking plane was dead except for the two of them. Ohhhh ... I babel but its because i can't stand to give this thing away yet I just gotta write about it.

The movie is absolutely wonderful

The best movie since Independence Day.

(where the heck am I getting this stuff from?)

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