The Two Basic Functions of Business

Amar Pandit , CFA , CFP

Amar Pandit

A respected entrepreneur with 25+ years of Experience, Amar Pandit is the Founder of several companies that are making a Happy difference in the lives of people. He is currently the Founder of Happyness Factory, a world-class online investment & goal-based financial planning platform through which he aims to help every Indian family save and invest wisely. He is very passionate about spreading financial literacy and is the author of 4 bestselling books (+ 2 more to release in 2020), 8 Sketch Books, Board Game and 700 + columns.

September 1, 2023 | 2 Minute Read

In his 1973 book “The Practice of Management”, Peter Drucker wrote these golden words:

“The purpose of a business is to create and keep a customer. Because the purpose of business is to create a customer, the business enterprise has two and only two basic functions – marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

If you survey the leaders of most companies (irrespective of the size), chances are you will hear the following words – Sales, Finance, Production, Human Resources, Operations and Compliance. What do you think is missing?

Well, I have already given the answer – Marketing and Innovation.

What are the most important functions of your business?

How much time, money, energy and attention are you investing in these basic functions?