Money is the energy that powers human work. The rules that govern the flow of energy and information are the same for marbles rolling down ramps, electricity, and business systems.
Business systems can be visualized in scale models that show the proportional value of the potential and kinetic money (sales funnel and income statement), the processes that move the money, and the performance of the work at each step in their individual workflow.
Transaction Value: Money has an index value that is relative to other currencies. In a business, the value of the Customers equals the value of the average transaction times the number of customers in the date range. This matches revenue for that period.
Kinetic Money: The money moves through a business system. The velocity of the money flows at a rate of transactions per unit time. In my business, I measure the income velocity in “dollar-per-hour”.
Work Done By the System (Energy Transfer): Money is moved through sequences of work by people doing processes. It is possible to visualize the energy transfer in a scale model that shows the value and velocity of the money, the performance of the processes, and the performance of the people doing each step of the work.
Potential Money: The money flows through stages. It loses energy every time it flows to the next sequence of work.
Friction: The processes that move money have a cost at every step. This is called a transaction fee is it represents resistance or friction. Green is low costs, Yellow is expected costs, Red is high costs.