The Five P's of a Profitable Business - Purpose, Position, Promotion, Performance, and Phun
by Sid Smith

Have you ever heard anyone say, "I'm not in business to make money. I simply do it because I love my work." Now, I'm a very strong believer in loving what you do - why else would you do it? But if you're a business person, and you don't think about being profitable, you won't be doing that work you love for much longer.

Making a profit is NOT an option. It's a misguided assumption that non-profit organizations don't make a profit. They have to in order to keep re-investing in the business of serving others. The more profit you make, the more you're able to serve your clients powerfully. That's the naked truth, and there is just no getting around it. If you're putting all your energy into worrying about being in business in six months, you won't have much to give your clients, will you?

That's why it's so important to put a huge emphasis on making a profit in your business. But how? Ah, yes… the $1 million dollar question. Fortunes have been made and volumes published on this subject, many with the words "fast, quick, or instant" in the title. Forget fast. Forget quick. Forget instant. Let's talk about becoming profitable in an "effortless" way.

Face it. Running a business is hard work. It (hopefully) is fun, emotionally rewarding, and has a sense of freedom you don't normally have working for someone else. That's why you started your business, right? I suspect though that nobody told you how much work it would be. Am I right? I am reminded of the time I attended an evening talk by the Dalai Lama at UCLA (right next to Beverly Hills). One attendee asked, "what's the easiest way to enlightenment?" The Dalai Lama, great man of compassion, pounded his fist on the table and said in no uncertain terms, "There is NO easy way to enlightenment! It is HARD work!"

Phew! Hard work? Yes, indeed. But, let's distinguish between hard work and effort. Have you ever had an experience of working really hard at something and having the time pass by so quickly you skipped a couple of meals? Not only that, but weren't you energized afterwards, perhaps even having trouble getting to sleep? Not only didn't the hard work drain you, it FILLED you with energy and enthusiasm. That's what I'm talking about. The work itself was hard, maybe lasting a number of hours; and it was effortless.

Watch the clouds sometime. They move in the wind with no effort whatsoever. Water flows down the stream or river effortlessly, moving around or slowly eroding obstacles along its path. It moves in the direction of least resistance, eventually making its way to the sea - the river's destination or goal.

Having a profitable business is like a flowing river. If you try to force it uphill it won't get very far. Allow it to flow in its natural direction, and it will eventually get to its goal, even if that means meandering across a long valley or pushing its way through a rocky gorge. Keep this in mind as you explore how you can best implement the 5-P's of Having a Profitable Business.

The 5-P's of Having a Profitable Business: Purpose, Position, Promotion, Performance & Phun.

  1. Purpose

    Purpose is defined as "The object toward which one strives or for which something exists; an aim or a goal". Remember this quote from Ecclesiastes (popularized by The Byrds)? "To everything there is a season, and a time for every purpose under heaven." Having a purpose (aim, goal, something one strives for) is perhaps the most critical component of having a profitable business.

    Why are you doing what you're doing? What purpose are you serving, whether that purpose be self-serving or other serving? (There's always a little bit of both) Have you identified your vision, mission and values yet? Do you have a clear description of who you serve and why you serve them? Here are a few questions that might help you clarify your purpose.

    • What value or purpose does your product/service provide to your clients?

    • Why is this important to YOU?

    • If you weren't able to be of service in this way, how would that impact your life?

    • When your business is flowing well, WHY is it flowing well? (Really think this one through, and don't worry about tooting your own horn. After all, who else's horn would you toot?)

    Get the idea? To get really clear about your purpose is to understand not only why you're doing what you're doing (the selfish reasons, not altruistic), but what would happen if you didn't have this business. Those companies who know precisely why they're in business, who they serve, and why they serve them are far more successful over the long haul than those who are simply in it because of an "opportunity". Don't get me wrong - taking advantage of an opportunity that presents itself isn't a bad idea. If you can truly get in, do it, and get out you can use the income you generate to do what you really want to do. However, that's not the reason most of us create a new business.

  2. Position

    Position is your market position. This is where you clarify who you serve (target market) and how you position yourself in that market. In his book, Purple Cow: Transform Your Business by Being Remarkable, Seth Godin provides another 6th "P" - "Purple". He describes driving through France, being enchanted by the hundreds of cows grazing the picturesque pastures next to the highway. Enchanted, that is, for about 20 minutes. Then it became boring and common. But, he says, what if you suddenly saw a Purple Cow? You'd probably want to stop and check it out.

    That's what Position is all about - becoming a Purple Cow in a market filled with regular, boring cows who are all saying and doing the same thing. By becoming a Purple Cow, you position yourself ahead of the rest of the herd - out front, attracting the kind of attention you really want. As Godin says in his book, there is no formula for how to become a Purple Cow, only that it's the Purple Cows who are most likely to get noticed in today's market place. It could be something as simple as offering a guarantee that so far surpasses everyone else in your industry that you can't help but be noticed. Saying you have "outstanding service" or have a value of "customer delight" is pretty meaningless these days. Everybody is claiming the same things.

    Becoming a Purple Cow, or "positioning" your business so that you're recognized and even sought after means discovering THE way you serve YOUR market that is unique and special. It doesn't mean making a "better product" or offering more services. It does mean doing these in such a unique way that you become the Purple Cow of your industry. But how? I can't answer that for you, but I can ask some questions (that's what I do as a coach) that might help you come up with your own answer.

    • What do you (or can you) offer that nobody else in your industry offers?

    • If you were to dress your company up for Halloween and win the top prize for your costume, what would your company be wearing? (OK - get that right side of your brain in gear!)

    • Take a "personality snapshot" of the people in your company. Are they "mountain climbers", "extreme sports enthusiasts", "teachers", "magicians", or "counselors"? Find an archetype or metaphor that best describes the personality of your company, then begin positioning yourselves in a way that makes use of the archetype. For example, Rich Fettke is a very successful coach in part because he's successful at extreme sports; hence the popularity of his book, Extreme Success.

    • What are ways you can distinguish yourself from others in your marketing material? The term most often used is your "Unique Value Advantage". I've also heard it referred to as your "unique serving proposition". It is a description of the unique way you serve and provide value to your clients. It is NOT a description of what you do. For example, "I help small businesses make more money while having more fun." It begs the question, "How do you do that?"

  3. Promotion

    It's one thing to have a great vision, and another to have your Purple Cow. You won't get many new clients, however, if your Purple Cow is stuck in your basement. Promotion is about getting out there and being visible. There are a number of ways to become visible, including walking naked through your town square. However, I wouldn't recommend that as a way to get new clients, unless your business specifically involves nudity. I'll list some of these ways in order of preference. All of these methods require you to have some kinds of marketing material. At a minimum you should have a business card that says who you are, who you serve, and if possible your unique serving proposition. Brochures are minimally useful and have mostly been replaced by web sites. Web sites can be changed on the fly and can better reflect who you are today. If you're planning on speaking or writing, have a good speakers kit, bio, and information about who would be served by contacting you (and how). Again, this is not a description of what you do.

    The top promotion methods are listed first.

    1. Having a strong proactive referral generating system. You can have a passive referral system, where you provide really good service and people naturally refer clients to you. My chiropractor is like that. He's so amazing that I'll tell anyone and everyone about him. However, as Clifton Pieters and I explain in our book, SHOW ME THE PROFITS! Closing More High Margin Sales With Referral Selling Secrets, it takes years to build up this kind of referral network if you do it passively. Actively building a strong referral network takes some work, but if you take the right steps it can happen fairly quickly.

    2. Writing and Speaking. I lumped these two together because one leads to the other. If you write, you'll more likely get speaking engagements. If you speak, you'll have more things to write about, then get more speaking engagements. Writing includes: having a web site, articles, books, and "special reports".

    3. Press releases. I haven't mastered the art of a good press release. However, here are a few good resources:

      http://www.yudkin.com/marketing.htm
      http://www.pressreleasehelp.com
      http://www.hartunian.com http://www.comprehensivecoachingu.com/audio.htm#publicity

    4. Networking. There are two kinds of networking - virtual and real. Virtual networking includes having a web site, an email-based newsletter, and belonging to several industry-specific email discussion groups. These are great ways to demonstrate your expertise and unique way of serving your clients. Real networking includes: setting lunch dates, informal meetings with colleagues, and formal networking events. Just be certain that you don't trip over yourself when asked what you do.

    5. Flyers and Brochures. These are proving to be fairly ineffective in most circumstances. Unless you've figured out a way to differentiate yourself (flashing billboard in the checkout stand at your supermarket), flyers and brochures are mostly ignored. If you're going to do anything, make it an "invitation". Everyone likes to get invited to parties, so create a game or party to which you can "invite" special guests.

    6. Advertising. Advertising can work if you do it well and in the right place. Say you're a business coach. Putting an ad in the Yoga journal for "Business Coaching" may not be the best move. However, if you've developed a unique way to help autistic kids do yoga, readers of the Yoga Journal may be happy to contact you.

  4. Performance

    So far, you've created it, positioned it, and promoted it. But, can you do it or make it - consistently, efficiently, and with outstanding quality? In today's market you not only have to walk your talk, you have to walk your talk better than anyone else. Performance isn't just about words. I've been working with one client who's company provides a complex software system to various industries. At the same time they promoted (publicly) one of there core values as "customer delight", they laid off over 30% of their support staff. Their customers are anything but delighted, but they're still pushing those employees who are remaining to create this customer delight.

    Your employees ARE your first and primary customers, The better they perform, the more outstanding will be your products and service. It's been interesting reading about the various performance and quality improvement trends. In every case, it boils down to the simple idea that if the employees of a company are valued, respected, and provided the resources they need to grow, the company will thrive.

    Performance begins and ends with values and purpose. A company whose processes and methodologies revolve around a set of shared values and purpose will always far outperform a company (such as my client's software company) whose values are stated, but not shared.

    Once you're totally clear on values and purpose, creating processes for effective performance becomes much easier. This can involve customized variations of the following 5-step process:

    1. Evaluate where you are, what you're doing that's working, and what you're doing that's not working.

    2. Get universal agreement (as much as possible) on what you want to create.

    3. Based on what's working now, what can be improved and how?

    4. Expose and address any "pain" caused by what's not working.

    5. Organize actions and processes around what you want to create, not the current situation.

    The key to having consistent, top performance is to continually re-direct your focus to what you're wanting to create. When problems or challenges arise, address them immediately, not from the perspective of "what's wrong here" or "who screwed up", but from a perspective of that says, "clearly this is not working optimally. What IS working here, and how can we do something very different that moves us closer to our goal."

  5. Phun

    I think I should add that word to my computer dictionary. Pronounced "fun", this fifth "P" of having a profitable business is perhaps the most important. You've probably seen this with other businesses, and perhaps even your own. The moment the business or job ceases to be enjoyable, performance, creativity, and innovation decrease. The high tech industry, for example, has gone through a tremendous change. Many companies are now in the business of trying to make a better "thingy" than their competition, rather than coming up with anything new. They can't. Their employees are there because they're not independently wealthy, not because they love the work.

    Having fun (phun) doesn't have to be expensive, or even time consuming. The annual party is OK, but it's not what will bring a smile to the face of your employee every other day of the year. What can you do on a daily, regular basis that says to your employees (and to yourself if you work alone), "you're important, and your happiness is important"? Here are just a few ideas:

    • Create games or contests. While not everyone likes to compete, many do.

    • Pass around an email joke of the day.

    • Make light fun of yourself, and even your culture.

    • Have a "silly nose" day.

    • Make meetings more enjoyable by: starting on time, ending on time, and giving everyone a chance to participate.

    • Open meetings with a poem, fable, myth, or story that's relevant to the subject matter. · Start your day with a moment of silent meditation.

    • Get out into nature often.

    • Create a working environment that evokes playful passion. Sterility does NOT improve performance (except perhaps in a microchip plant).

    Get creative, and give yourself a break. Hire a coach (me) to help you through both the rough spots and the high points. Hard work doesn't have to be full of excruciating effort. Hard work can be quite fun.

So, get out there, Get it done, and have fun!


Sid Smith is Coach, Trainer and Speaker from Portland, Oregon, who stops business professionals from swimming upstream. His specialty is Energy Management, and he uses his books, coaching, workshops and consulting to help people "get it done, and have fun". Learn how to work at peak performance with mental toughness, emotional resilience, and physical readiness. Oh, and maybe wear a silly hat just for good measure. Sid Smith 503-287-0246 email:sid@sidsmith.com and visit www.sidsmith.com .

Many more articles in Performance Improvement in The CEO Refresher Archives

   


Copyright 2004 by Sid Smith. All rights reserved.

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