There is a difference between selling a product and building a business that sells a product.
This difference between a business and a product is not talked about enough.
That’s why you’ll find that many small business owners find it difficult to differentiate between them.
But I believe the difference as we would discuss it today holds some insights that entrepreneurs would be helpful in their journey to build and scale their businesses.
Keep reading, let me walk you through the difference as we unlock insights that make it important to you.
Difference Between A Product And A Business
A product is something that you can create and sell. It could be an idea, a good or a service that has value because it satisfies a need in the market.
But a business is an entity that combines people, processes, tools to produce goods or services to make a profit.
From the definitions, you can see that although a product by itself meets a need, and can be exchanged for money, it lacks the structure that a business has.
This brings us to another area of difference between product and business.
A product can be created by an individual and often requires the presence or effort of that individual to function, but a business can operate with its owners and requires the effort of more than one person to sustain it.
This is an important point because so many entrepreneurs that think they’re running businesses are just selling products in this sense.
Yes, a business can sell products, but such products are only a fraction of what makes the business valuable.
The business can produce as many products as it desires, and can often continue doing business even without some of its products.
But a product does not have that advantage, it does not provide value beyond itself.
In a business, revenue is predictable and sustainable over time. But a product offers inconsistent revenue and is unpredictable.
With a business, your revenue is sustainable because the focus is not on making one-off transactions, as is common with a product.
The focus is on acquiring repeat customers. The product’s goal is to be sold to as many people as possible.
The market of a product is wide and fluid.
A product can be sold to everyone, but a business has a target market that is strategically chosen because of the impact they can make and how passionate they are about the product.
So, when someone says, “My customer is everyone,” ask them if they are a product or a business.
A product is similar to other products like it. A business offers a product but can differentiate itself from others by making it stand out in a way that is valued and appreciated by customers.
Lastly, to further speak to its sustainability, a business is long-termed focused because it wants to last as long as possible, so it builds customer relationships and creates strategies that help to achieve this goal.
But a product’s focus is more short-termed. It is about making quick bucks and is willing to sacrifice customer relationships and name to achieve that goal.
Hopefully, these differences between selling a product and building a business that sells products help you work to make your business on the path of growth.
If you have questions and would like to speak with me directly, click the call button at the top of this page or simply schedule a meeting.