By Suneera Madhani, CEO and founder of Fattmerchant and Stax, a payment technology company, and CEO School, a top 0.5% business podcast worldwide for women.
Real talk: Being an entrepreneur is tough.
Though some would lead you to believe that it’s an Instagram-worthy life filled with rainbows and unicorns, the truth is that it’s a lot of hard work, and it’s not for everyone. Even those who went to business school received only part of the story of what it takes to be successful.
After eight years of running seven- and eight-figure businesses, working with hundreds of entrepreneurs, I’ve honed a simple framework that has helped me find — and maintain — success.
Whether you’re a first-time entrepreneur or the CEO of a $100 million company, your ability to grow and scale your business comes down to five P’s: power, people, product, process and profit.
Let’s walk through each of them and why I advise working on them in this order.
Power is the base of my framework because it’s the most important. Many entrepreneurs begin with profit, but they’re missing an opportunity to strengthen their very foundation.
“Power” translates to those things you need to be an excellent CEO and leader. Your mindset, your ability to execute, how you show up, how you deal with pressure, how you take on challenges and how you navigate the ups and downs of entrepreneurship are things that will help you excel or be your undoing. The hardest part of your business journey will be working on yourself to strengthen your power, and taking the time first to identify your “why” and vision will help you create a rock-solid core from which to build your business.
Once you’ve mastered power, focus your attention on people.
People are the biggest asset of any business, yet I’ve seen too many CEOs not put enough emphasis on this critical component and wonder why their business is struggling. The key is to find the right people and put them in the right roles in the right culture. Don’t forget that as CEO, you need to inspire your people (that’s also why I advocate starting with power). When everyone feels aligned, you’ll have greater teamwork and collaboration, which will lead to better results. My hiring philosophy is 1+1 = 3, meaning that your next hire shouldn’t simply divide existing work; they should add strategic value to help you amplify your business. And the concept of people applies not only to your team but also to those around you, including mentors, investors, vendors, communities and partners.
After you’ve worked on your power and people, consider product.
The greatest sales engine in the world can’t save a terrible product, so make sure your product has the right fit for your target market and is so “sticky” your customers will want and use it. It’s important to note that your product needn’t be perfect; in contrast, you want to constantly iterate to improve it. Be open to customer feedback, and make changes accordingly.
The next P to embrace — and the one it takes to truly scale — is process.
There are tools and processes designed to make you more efficient with your products, people and customers, no matter your business. With the right processes in place, you can 10X your business. Everything is a process that can be automated, delegated (meaning you shouldn’t do it) or deleted (it shouldn’t be done at all). When you think about your business in this way, processes will help you move the needle and scale faster.
The final P of the framework is profit.
As previously noted, most entrepreneurs rush to start with profit, but in my experience, when you master the other four P’s in this order — power, people, product and process — profit naturally follows.
Profit is more than being profitable; it’s adding value to the top and bottom lines to be capital efficient. It’s about knowing your numbers and having them work for you instead of the other way around. For example, at my company, even though we’re a VC-funded startup, we’re lean operators, so every dollar invested yields $5. Use key performance indicators (KPIs) to understand your business fully because, without revenue, you don’t have a business.
There’s no doubt that entrepreneurship is a challenging journey that not everyone will want to take. But for those who do, focusing on the five P’s and following this simple framework can help them grow and scale their businesses.
Source by www.forbes.com