The Core of a Business - Key Activities & Resources: Crash Course Business Entrepreneurship #8
Summary
TLDRThis Crash Course Business episode, hosted by Anna Akana, delves into the multifaceted daily tasks of entrepreneurs. It explains that beyond passion and problem-solving, entrepreneurs must juggle various roles including marketing, sales, finance, and HR. The video emphasizes the importance of identifying key activities essential for delivering value to customers and maintaining a competitive edge. It also introduces the concept of key resources, which are crucial for executing these activities. The episode uses examples like SquareSpace to illustrate how businesses align their activities and resources to achieve their value propositions, encouraging viewers to consider their own entrepreneurial tasks and resources.
Takeaways
- 🚀 Entrepreneurs wear many hats, including marketing, sales, finance, and HR.
- 🌟 Entrepreneurship often starts with a passion or a problem that needs solving.
- 📈 Key activities are the tasks essential to maintaining a business's competitive advantage.
- 📋 Key resources are the 'stuff' needed to perform key activities, like physical assets, intellectual property, human resources, and financial backing.
- 📝 Writing down a value proposition helps clarify what customers should choose a business for over competitors.
- 🎯 Prioritizing key activities helps entrepreneurs focus and develop effective strategies.
- 💡 Planning minimizes surprises and boosts confidence in business operations.
- 📑 The Business Model Canvas is a tool for outlining a business's key activities and resources.
- 💼 Examples of key resources include physical assets like warehouses and intellectual property like branding and patents.
- 💰 Financial resources are crucial for funding operations, from purchasing equipment to securing lines of credit.
- 🔍 Analyzing a business's key activities and resources can reveal its operational strategy and competitive advantage.
Q & A
What is the primary role of an entrepreneur?
-An entrepreneur's primary role is to oversee and manage all aspects of their business, including marketing, sales, finance, and human resources, even if they started with a specific passion or idea.
What are key activities in the context of a business?
-Key activities are the tasks that are absolutely necessary to maintain a business's competitive advantage and keep it running smoothly, such as product creation, marketing, and customer service.
Why are key activities important for a business?
-Key activities are important because they directly contribute to delivering the value proposition to customers and maintaining the business's competitive edge.
Can you give an example of a key activity from the script?
-An example of a key activity is playing the ukulele for someone who teaches ukulele lessons, as it is essential to their service delivery.
What are key resources, and how do they differ from key activities?
-Key resources are the assets required to perform key activities, such as physical, intellectual property, human, and financial resources. They differ from key activities in that they are the means or tools used to carry out the activities.
Why is it crucial for entrepreneurs to identify their key resources?
-Identifying key resources is crucial because it helps entrepreneurs prepare for and avoid potential operational issues, such as running out of stock or lacking necessary equipment.
What are some examples of physical resources mentioned in the script?
-Examples of physical resources include manufacturing equipment, buildings for employees, warehouses for product storage, vehicles, cash registers, credit card machines, and distribution networks.
How does intellectual property contribute to a business's success?
-Intellectual property contributes to a business's success by providing a unique selling proposition and a competitive advantage through patented or copyrighted ideas, designs, and branding.
What role do human resources play in a business?
-Human resources play a vital role in a business by providing the specialized skills and knowledge needed to execute key activities effectively.
Why is financial planning important for entrepreneurs?
-Financial planning is important for entrepreneurs to ensure they have the necessary funds to cover the costs of key activities and resources, which can lead to business growth and sustainability.
Can you provide an example of how a business like SquareSpace utilizes key activities and resources?
-SquareSpace utilizes key activities such as providing website building technology and customizable templates, and key resources like programmers, servers, and marketing efforts to deliver their value proposition.
What is the significance of aligning key activities and resources with a business's value proposition?
-Aligning key activities and resources with a business's value proposition ensures that all efforts are directed towards achieving the intended customer value, leading to a more focused and successful business strategy.
Outlines
🚀 Entrepreneurial Roles and Key Activities
This paragraph delves into the diverse roles entrepreneurs play in their businesses. It starts by questioning the daily tasks of an entrepreneur and contrasts it with traditional business roles like marketing, sales, finance, and HR. The script highlights that entrepreneurs often start with a passion or a problem-solving mindset, leading to business creation. It emphasizes that they must handle a variety of tasks across these domains. The concept of 'key activities' is introduced as the essential tasks required to maintain a business's competitive advantage and deliver value to customers. Examples are provided to illustrate how even niche businesses like pickle-making or landscaping require a broad skill set. The paragraph concludes by encouraging a focus on key activities and resources, suggesting that planning and prioritization can prevent costly mistakes and build confidence.
🏗️ Identifying Key Resources for Business Success
Paragraph 2 explores the concept of 'key resources,' which are the assets necessary to perform key activities in a business. It begins by posing questions about the resources needed for an online merchandising business, such as platforms, storage, shipping materials, and human labor. The paragraph categorizes key resources into four types: physical resources like equipment and buildings; intellectual property including patents and branding; human resources with specialized skills; and financial resources for funding operations. Examples are given for each category, such as Amazon's reliance on warehouses and Nike's strong brand identity. The importance of aligning key resources with a company's value proposition is stressed, using SquareSpace as a case study to demonstrate how their physical, intellectual property, human, and financial resources support their business model. The paragraph concludes by encouraging businesses to focus on essential activities and resources for success.
Mindmap
Keywords
💡Entrepreneurs
💡Key Activities
💡Value Proposition
💡Competitive Advantage
💡Key Resources
💡Intellectual Property
💡Human Resources
💡Financial Resources
💡Business Model Canvas
💡Thought Bubble
💡Pricing Strategy
Highlights
Entrepreneurs often start businesses out of passion or a desire to solve a problem.
As entrepreneurs, we have to handle all aspects of business including marketing, sales, finance, and HR.
Key activities are tasks essential to maintaining a business's competitive advantage.
Key resources are the necessary materials and tools to perform key activities.
Planning minimizes surprises and helps in making better decisions.
Focus on activities that are crucial to delivering your value proposition.
Key activities can include less glamorous tasks like marketing and administrative work.
Ask precise questions to identify your business's key activities.
Physical resources include manufacturing equipment, buildings, warehouses, and distribution networks.
Intellectual property covers patented or copyrighted ideas, branding, and customer databases.
Human resources involve people with specialized knowledge and skill sets.
Financial resources are necessary for funding key activities and resources.
SquareSpace's key activity is providing technology for website creation and hosting.
Aligning key activities and resources with a business's value proposition is crucial for success.
Crash Course Business is sponsored by Google and features graphics by Thought Cafe.
Support Crash Course on Patreon to help keep it free for everyone.
Transcripts
What do entrepreneurs do all day?
I’m not joking.
What are we actually supposed to do all day?
When someone says they’re “studying business” or they “work in business,” they could
mean so many different things.
They could be in marketing, sales, finance or human resources.
So much goes into keeping a company running smoothly.
As entrepreneurs, we probably stumbled into business -- we were passionate about an idea
or saw a problem we wanted to solve that developed into a business.
Or maybe our side hustle got so big it turned into our main hustle.
So here’s a secret: as entrepreneurs, we have to do all those business-y jobs.
Yes marketing, yes sales, yes finance, yes HR.
You may be concocting the perfect blend of spices for artisanal pickles, but you still
have to complete payroll.
You may love being outside planting flowers and sculpting shrubs, but you still have to
market your landscape business.
You may draw a daily webcomic, but you still have to make sure the tech is running smoothly
and your website design is on point.
There’s so much to do!
But to help us prioritize, we need to figure out what tasks we need to do to deliver value
to our customers -- called key activities -- and what stuff we need to get it all done
-- called key resources.
Don’t worry, we’ve got this.
I’m Anna Akana, and this is Crash Course Business: Entrepreneurship.
[Theme Music Plays]
Our idea is the core of our business, but so much more goes into operating a business
day-to-day.
In our value proposition, we wrote down why customers should choose us over the competition
-- our competitive advantage, if you will.
All of the tasks we absolutely need to do to keep our business going and maintain that
competitive advantage are what we call our key activities.
So yeah, if you teach ukulele lessons, playing the ukulele is one of your key activities.
But let’s not forget about all the less sexy stuff that you -- or your staff if you
have one -- are doing every day.
Maybe it’s putting up flyers advertising your fun music curriculum.
Maybe it’s making and posting how-to videos on YouTube.
Maybe it’s offering free trial lessons at the public library.
Or maybe it’s just driving from client to client.
Or biking, scooting, unicycling... you do you.
For IKEA, they need to design new 1000-piece puzzles -- I mean… furniture -- that people
will want in their homes.
But they also need to source materials that are high quality but low cost to keep prices
down,
keep their stores stocked, manage any shipments, maintain their website, and update social
media to show off those meatballs and communicate with customers.
When we’re just getting started, figuring out what’s essential to our business keeps
us focused, helps us develop strategies to make better decisions down the road, and potentially
saves us a lot of time and money fixing a big mistake.
Planning minimizes surprises.
And I don’t mean a “found 20 bucks in your pants pocket” surprise, but “the
website went down and customers can’t make orders” surprise.
Not to mention, I just feel wayyy more confident when I’m well prepared.
So what do I really do all day?
For me, one of my key activities is writing.
YouTube videos, TV pilots, songs, books -- I do a lot of writing!
But when I put that down on my business plan outline, like the Business Model Canvas in
the Key Activities section, I’m not going to spell out exactly how long I’m going
to write each day or get into specific word counts.
Think big picture to start and keep it simple.
You don’t need every logistical piece entirely mapped out!
And remember, we’re focusing on the activities that are absolutely crucial to delivering
our value proposition.
If I listed out every single thing I do in a day, we’d be here for a while.
So I’m not going to put down “feed cats,” even though they might be hungry, because
that’s not directly helping me deliver value to my audience.
Or is it?
To really make sure we’ve covered our bases when making a list of key activities, we can
ask some precise questions.
One, if you have a product, what are the necessary steps to produce it?
Two, if you have a service, what are you offering customers and what do you have to do in order
to provide it?
Three, how are you sharing updates and information with customers, or how are they getting your
offering?
Four, what’s most important to creating revenue?
-- Do you sell products in stores?
Source materials to make your products?
Create bundles of services to sell?
And finally, what activities do you find yourself doing every day?
So we do amazing things that provide value for our customers, but all that doing usually
relies on having stuff.
In business speak, the stuff we need to accomplish our key activities are known as our key resources.
If we don’t outline our key resources, we might get caught unprepared or not be able
to perform one of our key activities.
Knowing /what/ is just as important as knowing how!
If you’re selling merch online, what online store system are you going to use?
Amazon?
Shopify?
Instagram?
Etsy?
Will you need software to record the sales so you’re ready for tax season?
Will you need storage for the merch in your basement?
Will you need shipping materials to send packages?
Will you need employees to help you operate all of this?
There’s a lot to consider, so let’s break key resources up into four loose categories.
***First, there are physical resources for business activities like manufacturing equipment,
buildings for employees, warehouses to make and store products, vehicles, cash registers
or credit card machines, and distribution networks.
For example, Amazon relies heavily on their warehouses -- both for data storage and product
storage.
They also need all the equipment to create their original products, the buildings that
their employees work in, as well as the locations of the 11 physical Amazon Go stores that exist
as of 2019.
***Next, Intellectual Property covers various ideas that can be patented or copyrighted,
which includes specific branding, proprietary knowledge, partnerships, and customer databases.
IP resources are tough to develop because it takes creativity to come up with a completely
unique idea or design.
But then you have something no one else has, or they have to pay you to use it -- and if
they don’t, it could be illegal and it’s definitely unethical.
So… don’t steal!
Intellectual Property is an incredible competitive advantage that helps us stand out.
When I say the word Nike, what springs to mind?
[I’m just guessing, but probably not the Greek goddess of victory...]
The “swoosh” and “Just Do It” are everywhere in the athletic world.
Nike relies heavily on their brand, plus patented technologies for things like textiles and
shoes, to draw in customers.
***Now, both of these kinds of resources don’t magically create or operate themselves.
[This isn’t Fantasia.
There aren’t any magic brooms.]
Often we have tasks that only some people can handle because they involve specialized
knowledge.
These human resources -- or people with specific skill sets -- pop-up all over different industries.
More people probably know how to swing a hammer than weld.
Laika Studios creates stop-motion films like Coraline or the Corpse Bride, which are notoriously
time-intensive and have thousands of moving parts.
The handmade puppets and character designs depend on a bunch of humans: painters, sculptors,
screenwriters, film editors and more to tell these stories.
***And, lastly, key activities and resources aren’t free, and might not even be cheap.
So we need financial resources.
***For example, an aspiring photographer might save up cash to purchase high-quality equipment
and launch their independent photography business.
***A local retail company may opt for a line of credit in order to manage the ebb and flow
of their patrons.
***And a tech startup might tempt talented programmers into working for them by offering
them stock options as part of their contract, kind of like a financial bonus.
We can think about any business and do some detective work to guess how they might put
all these key activities and resources together.
So let’s go to the Thought Bubble and take a look at one example.
Maybe you’ve heard of SquareSpace, the website building and hosting company.
So… besides what you’ve heard in ad reads... what do they do exactly as a business?
From the About section of the SquareSpace website, we can find their value proposition:
Basically, their main key activity is providing the technology to help people make and host
websites.
And part of their competitive advantage is that they offer customizable themes and templates
that hopefully help people make websites that look good.
They also provide digital storage and backups for all their sites, and they use marketing
and advertising -- like paying YouTubers -- to tell potential customers about their services.
Now to accomplish these key activities, they need key resources.
Physically, they need buildings for their employees and servers for data storage and
website hosting.
And part of their intellectual property is all the website templates that they provide
users.
Human-wise they need programmers, graphic designers, marketers, customer service reps,
and people forging key partnerships [like with exciting personalities like, ahem, me].
And all of this requires money or financial resources.
SquareSpace raised private cash to get started and then got more funding from investors to
grow rapidly in the easy-to-use web design market.
All these key activities and resources align with their value proposition.
So any business, including our own, should take a similar approach and make sure to stay
focused on what’s essential!
Thanks, Thought Bubble!
Focused businesses, where all key activities and resources go into achieving the value
proposition, have clearer pathways to success.
Ultimately the bottom line is: What do you do, and what do you need to do it?
Next time, we’ll continue diving into the Business Model Canvas sections by identifying
all the people and businesses /outside/ your company that can help you thrive.
Thanks for watching Crash Course Business which is sponsored by Google.
And thanks to Thought Cafe for the beautiful graphics.
If you want to help keep Crash Course free for everybody, forever, you can join our community
on Patreon.
And if you want to learn more about how to organize your schedule so you can get your
key activities done, check out the Crash Course Business: Soft Skills episode about time management:
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