Use the 7P Framework to Increase Sales and Profits and Avoid Business Failure

Owning a small business is a tough job that never ends.  Every owner can always be doing more, yet most are already investing more time, money, energy, and heart in their business, leaving them with nothing left to give to their loved ones.  Business owners that fit this scenario are at the highest risk of going out of business. Their going-out-of-business exposure is proportionate to the number of consequences they must fight when the 7-P Framework is violated.

A consequence is a result or effect of an action or condition of something occurring earlier.  The word consequence is often seen as a negative word associated with negative outcomes, even though the word can also be used for neutral and positive results.

The 7-P Framework (7-P’s) represents seven organizing principles for managing a profitable business model.  Each principle exists to define the seven core conditions for making more money with less stress.  Failure to apply an organizing principle will negatively affect your business decisions and how your employees interact with your customers.

Use the 7-P’s to protect your business by focusing on the critical few things you need to do over the relevant many things you could or are doing.  You start to protect your business by having a working understanding of each of the 7-P’s relative to who your customer is, what it is you do for them, when do they most need you, where they will want to buy from you, why they should care about you, and how you will connect with them at a profit.  You best protect your business by knowing which 7-P your business is most vulnerable at, then take action to reduce the vulnerability or suffer the following failure points that left unaddressed, put your business at increased risk of going out of business.

 

 

 

 

1. Failure to know who should buy what you have to offer means failing to identify who you need to know of your business existence. When you don’t know the who, you waste promotional investments attempting to communicate with those who will never buy from you.
2. It’s impossible to know who you are looking for when you don’t know what they look like means that you won’t know your best target customer when they stumble across your business because you failed to define who your target customer looks like.

 

 

 

3. Not knowing what problem your target customer is trying to solve with their purchase from you leads to inefficient operations, wasted marketing, and sales investments as you struggle to produce and sell unwanted products and services.
4. Trying to be all things to all people to acquire top-line revenue distracts you from investing the time and resources necessary to completely understand who buys your product and, more importantly, why they decide to buy it.
5. Falsely assume demand will always be high and supply low for your product or service. Worse yet, be in an industry in decline due to product obsolescence, and you will own a struggling business.  Remember 8-track tapes?  What about cassette tapes and compact discs?
6. Failure to deliver the product or service when people tell you when they want; means they are likely to go to the business that will give it to them when they want it. The have it when I want it mentality means you need to either maintain sufficient inventory to meet demand or create the product or deliver the service when wanted.  Fail to do this, and your potential customers will either do without or, worse yet, go someplace else.
7. Know what people want from you or price yourself out of the market or lose money on every sale because you are operating with a product innovative or customer intimate strategic style against an operationally excellent competitor who has what your customer needs or wants.

 

 

 

8. Fail to know when your target will need or want your products or services causes you to waste promotional investments trying to convince people to buy from you when they have no interest at the time of your promotions in what you are offering.

9. Not knowing where they will want to purchase means you aren’t where they want to buy what you do. Making a poor choice of location robs you of ready accessibility and convenience for your customers.  Often, the little things associated with where you locate your business make a big difference.

 

 

 

10. Any employee that does not know the why behind what they do nor how they create value for your customers creates employee disconnects resulting in poor customer service. When phone calls and emails aren’t returned promptly, accurate billing provided, or win-win problem solving, with an overall, pleasant demeanor will quickly sink your business.
11. Miserable employees who consider any customer interaction an inconvenience lead to low customer retention. Even if it’s only one angry, unhappy, or depressed employee, poor employee morale will cause major havoc, quickly leading to lower profits and greater frustration for those working near and with the disgruntled employee.
12. Complacent employees who are too accepting of the status quo, mediocrity, or stagnation result in a lack of attention to what the customer wants and expect from your company now and in the future. Allow this to exist, and you will go out of business.
13. Employees who fail to see the noble purpose in what they do will fail to see the value in what they do; they will not go the extra mile nor give their discretionary effort to produce extraordinary results. Fail to help them make these connections; the best you can hope for is they will do their job resulting in less money being paid.
14. Holding on to employees that you know you should let go. Any employee who isn’t a good fit for your culture, you do them, your customers, and their coworkers a disservice by keeping them on.  While it’s never easy to fire someone, sometimes it’s the best thing for the employee.  In the long-term, a poor-fit, dismissed employee is likely to thank you, while in the short-term, their coworkers will celebrate you finally taking action.
15. Fail to collect and act on customer feedback about what you could do better; keep you doing what you have been doing while your customers take their business to someone who listens to them.

 

 

 

16. Neglect articulating how the buyer benefits from what they buy from you will result in few, if any, customers being able to articulate why they chose to buy from you over someone else. If your customers can’t articulate the value they get from you, they will not bring more customers to your business.
17. Customers can’t do business with you if they don’t know you exist. It costs a lot more to keep your business open for a small customer base than it costs you to advertise and promote your business through online marketing, social media, email, local search, and more.  You reduce the risk of ineffective marketing by factoring the costs of marketing and the sales it’s projected to produce into your business plan.
18. Don’t let ineffective sales techniques rob you of new customers. Failure to convert potential customers into customers is often a failure to lead them down a repeatable sales path (remember the purchase decision funnel?) to the endpoint of giving you their money to buy the things they need or want.  Don’t be like those who see sales as a dirty part of the business.  Learn to see the sales process as helping people buy the things they need.
19. Customer loyalty doesn’t just happen—you have to earn it. Watch your competition closely, and stay one step ahead of them.  If you don’t take care of your customers, your competition certainly will. Because customers are naturally motivated to go where they can find the best products and services, you need to know who your competition is, what they have to offer, and what makes you better than them.  Fail to do this, and you will see the customer you depend on to stay in business go to them.
20. The stronger the demand for a product or service, the greater the supply. When supply is high, you must have a strong value proposition to stand out from your competitors.  Competitors who offer similar products and services at a lower price provide higher value than you do.  Over time you will only have the customers your competitors find too expensive to serve.

 

 

 

21. Nothing you do in business matters if the prices people buy from you aren’t enough to earn a profit. com states that 40% of small businesses make a profit, 30% come out even, and the remaining 30% lose money. This is why half of all businesses fail in less than five years.  Financial mismanagement from not knowing where the money in your business is coming from (revenue) or where the money is going (costs) can arise due to lack of skill or interest in managing cash flow, taxes, expenses, and other financial issues. Poor accounting practice puts a business on a path straight toward failure.

Which P is holding your business back the most?

A business that isn’t producing the profits it should, or doesn’t have the cash reserves in the bank that gives ownership peace of mind, click here for a “no fee” business review to learn which of the 7-P’s is holding you back from earning higher profits with peace of mind cash reserves in the bank.