The 4 P's of profitability

Any entity hoping for success should have a solid plan along with qualified and experienced people. Once the plan and people are in place, it is up to the management team to perform, or execute the plan.

Any good plan will anticipate and address potential problems, and good people through good performance will anticipate and deal with problems. Nevertheless, problems still arise for any business.

The 4 P's of profitability are thus:

1. Plan
2. People
3. Performance
4. Problems

The following formula brings into sharp relief the 4 P's relationship to profitability.

This formula clearly demonstrates that the efficient minimization of problems enhances profitability.

Profitability, therefore, is the product of:

• Focused business planning, which should address strategic issues, business organization and operational details.
• Attraction and retention of qualified and experienced people who can manage the business to key metrics.
• Efficient execution of the business plan through performance that is evaluated and monitored against the plan.
• Swift and decisive action to anticipate or minimize problems that necessarily arise for every business.

Note that having the right plan and the right people are essential parts of the formula, and that performance multiplies and leverages the results. A key part of performance is teamwork and collaboration, so that all parts are managing toward the same goals.

Moreover, unsolved problems will negate all previous success if they become too prominent. Of course, this isn’t news to business owners and CEOs, but consistent monitoring, research and planning can be invaluable when addressing issues before they threaten a company's survival.

By addressing the 4 P's in some detail, on paper and through day to day execution, your likelihood of achieving profitability is greatly increased.

Start navigating your 4 P's by contacting us now. Together we can explore the natural force of this fundamental equation and appreciate its simplicity.