Key Lessons from Rebel Allocator

I will go in detail in a later post about this nicely written fiction, Rebel Allocator. I am half way through it. This post is about my key lessons regarding business from this fiction.

In order for a business to thrive, the value delivered to a customer has to be greater than the price the customer is charged, which has to be greater than the cost of the goods or service. Value is greater than Price which is greater than Cost.

This above may sound very simplistic but a very good summation of how a business needs to be. The difference between the price and cost is the profit a business makes. The difference between the value and the price is the brand a company has. 

The next lesson ties up these two entities in a very nice compressed but in a pithy manner:

Be the cheapest. Be the most convenient. Or be the best. Good companies aim for at least one of those objectives. Great companies find a way to achieve two. Doing all three is a rarity.

The above two lessons are a quite simple but extremely powerful way to judge a business. I find this interesting because, as a personal finance newbie, I really find it tough to assess or value a company or business. I have taken baby steps in understanding how to value a business or a stock. I want to understand how to know, what is a fair value for a stock. In that journey, Rebel Allocator is a very good start. An extremely well-written business-fiction about business, similar to Eliyahu Goldratt's Goal.