Marcus Lemonis, well known entrepreneur and star of the Profit, states that all successful businesses balance the 3 P’s – People, Process and Product. While simple in its presentation, massive it is in terms of value. Our guest today was Patrick Leask, an award winning Business Coach with Action Coach. Leveraging the tools and templates provided by Action Coach, Patrick works with business leaders and owners to achieve breakthrough performance in their business.
Patrick highlighted the 3 P’s in our discussion this morning on That Business Show. With a focus on people in the opening segment, we delved into how a business benefits from proper staffing. It is easy for a business owner to downplay hiring as an expense, saying to themselves – “I can do that for free, why hire someone else to do that?” They overlook their own value when making that statement; therefore it becomes imperative that an entrepreneur know what their hourly rate (value) is. Patrick estimates the typical small business owner is easily worth $100/hour so why would you spend time filing documents or answering phones when a $12.00/hour staff member could do that? The effect of that mentality becomes a net loss through indirect spending. To calculate your hourly rate, take your net income in a given period and divide that by the number of hours you spent working towards that income. That is your hourly rate and you should be cognizant of completing duties in lower pay grades and how they indirectly affects your bottom line. This whole discussion centered on when to hire the first person in your business – it is when you have a positive net income that is high enough to offset the cost of a staff member annually and leaves a remainder that is equal to your annual value.
The 2nd P is process. All businesses are nothing more than a collection of processes that have been put together in an efficient manner (or in some semblance of efficiency as it develops). FedEx is one of the best examples of what effective processes can do. Ironically enough too it began as an idea for a paper that the founder Frederick Smith wrote while a Graduate student at Yale. In the paper, he proposed the idea for overnight delivery anywhere in the World. The paper, while well written, received a C and the response from his professor that to achieve a higher grade, the idea needed to be feasible. Years later he would go on to develop Fedex starting with his paper as the initial business plan!
Lastly, all businesses have a product, the final P. Whether it’s a tangible item or a service, all businesses are in business to sell! Effective businesses provide a product or service that fills a void in the market in a cost-effective manner, essentially it is a solution to a problem. It is easy for many business owners to try and copy other solutions but great product/business success only results from distinct differentiation – what is it that your product has or does that no other product can do? On that note, we ended the discussion and it was a great start to the new year for That Business Show. Learn more about Patrick at www.actioncoach.com/patrickleask or give him a call today at 813-675-7722. Please subscribe to us on iTunes here and YouTube here for more entrepreneurial interviews daily on the show!