The 5 P’s Of An Amazing Business With Pete Mohr
Ep. 77: The 5 P's Of An Amazing Business
There are a myriad reasons for business failure. As an entrepreneur, you have to acquire the knowledge and skills to run your business smoothly. Things are very unpredictable, and your plans may not succeed, but you still have to keep going. You must also be aware of factors affecting your products or services. What are the key elements of a successful organization? Join your host Ryan Englin as he dives deep into a conversation with Pete Mohr about the 5 Ps of an amazing business. It’s time to equip yourself with strategies proven to scale your business up, reduce your frustration, and create more freedom!
The 5 P’s Of An Amazing Business With Pete Mohr
Being an entrepreneur can be challenging a lot of the time, from dealing with customers, people problems, customer service, and generating enough leads to grow your business. There are so many things as an entrepreneur we have to be involved in. Our guest is going to help you solve all of those by introducing you to the 5 Ps.
Our guest has put together a process where he outlines the 5 Ps of business to help you get more out of your business so that you can go from having a business that owns you, consumes your time, and takes you away from the things that are important to have a business that you love, enjoy, and excited about because it’s freed you up for the lifestyle you’ve always wanted. Our guest is Pete Mohr from Simplifying Entrepreneurship. He’s got a book coming out soon, and I’m excited about this episode.
Pete, welcome to the show.
Thanks so much for having me, Ryan. I’m excited about a good conversation.
We already got to talk a little bit. I can’t wait to share some of the stuff you’ve already shared with me with our readers. This is the same question I ask every guest because the reason we come here is to bring value to our readers and break down some of these beliefs that they have that are holding them back. What is the biggest myth about your work and the people you work with?
The biggest myth is that you have to be there to open your door every morning and close it every night as a small business owner. I work with mainly small business owners. This idea is that you have to be the first one in and the last one to leave. You have to be there for every decision and all the calls. It’s your business, you own it, and you got to be there. My philosophy is that you own your business, and it shouldn’t own you. If you’re feeling that you’ve got to be there for all that stuff, then hopefully, you’ll garner some actionable takeaways in our discussion.
What you’re telling me is I don’t have to have this belief that if I want it done right, I’m the one that has to do it. I don’t have to believe that no one’s going to care about my business more than me. The reason I show up early, and I’m the first one in and the last one out, is because I care more than everybody else. That’s not true.
I’m not saying you don’t care more. Most business owners care more than most of the people in their business, but that doesn’t mean that that’s the end-all and be-all. From that perspective, most of your team, the People with you, one of the Ps, do care. They do want to be part of it and all of this loyalty. This whole idea of the Great Resignation and all this stuff where everybody’s piling out, we can get into some chats around that, but the people that are with you do want you to succeed. They’re doing everything they can to make that happen because when you succeed, they succeed.You own your business. It shouldn't own you. Click To Tweet
This is the way of the future that people want to be part of this thing behind them. They want to be part of the drive and have accountability. The old way was that every owner thought that nobody wanted accountability and that they needed to own the accountability. In fact, everybody on your team does want accountability. They want to be able to make the calls, have certain levels of delegation, address certain concerns for your clients and customers, and all that stuff. It’s such an important piece.
For those that are still in the past and thinking that nobody wants accountability, it’s time to make a move and look at some of the structures around the fact that your team does want them, and it’s your job to communicate what those are with clear process and alignment of the culture, and you promise all of those different things.
I believe this too. People have this inner need and drive to be led. They want someone to lead them. Part of leading is holding people accountable and making sure they follow through and those kinds of things. You’ve already alluded to this a little bit, and I want to dig into this. You’ve already mentioned a P here. You’ve got this 5 Ps process that you’re working on, and I want to know more about that because I know People are one of them. We’ve talked about that, and I’m passionate about the people side of things.
There is so much more to business than just the people. When people come to me, they’re like, “I need help hiring. Can you work with my recruiter? Can you work with my controller? Can you work with my office manager?” I’m like, “No, I can’t because if you’re struggling to hire, and you’re a small business, the buck stops with you.” If you are at the top of that organization and struggling to hire, the owner has to be involved. I know you work with these owners, but a lot of times, these owners get in the way. They are the ones holding the business back. Share with us the 5 Ps, and let’s talk about this a little bit.
In the midst of writing a book around this concept, I’ll give you the 5 Ps right off the bat. The 5 Ps help reduce your frustration and create more freedom in your business. Understanding your Promise, aligning your Product or service, if you’re a service-oriented business, your Process, and your People so that you can enjoy the right amount of Profit.
This alignment to the promise is the only way to profit. Profit brings freedom. You can buy back other people’s time. You can enjoy some of the things that you want to do, not feel the pressures of managing your business instead of owning your business, and a lot of these different things. Everything always ties back to the promise.
This is one of the interesting things that I’ve seen over the last couple of years here. As people have changed in the way that they deliver their services and market their services or products, and the consumer wants to receive them, they still think that they want to deliver their promise in the same way they used to a couple of years ago.
We’re talking to blue-collar workers, and I’m from a blue-collar background. I had bathroom renovation companies and cleaning companies, so I get it. The ways that you used to deliver are not necessarily the way that they want to be delivered now. Understand what your promise is. I’m not saying you have to change your promise. You might have to tweak it.
Here’s how you develop a promise in very simple, easy language. What’s the client’s problem? What’s your unique process for taking them through their problems so that they can enjoy a better life? Everybody buys a better life. It doesn’t matter what you do. You’re always putting your money on the table when you buy a better life.
If that middle part has changed for you in the last little while, that’s an important piece. Small tweaks to your promise can do big things in the rest of the alignment between your product, your process, and your people in order to deliver that and break through those glass ceilings that you were saying about.
It’s interesting how you put promise first and keep going back to the promise. The profit only comes when you have the promise. If you have a good process, people, and product, you’ll have profit, but you keep saying this promise piece, which resonates with me because if you’re familiar with my model, it’s all about core, culture, and emotional connection, which most people forget and disregard. I love that you’re putting that promise in there. Is this one of the bigger things that are missing when entrepreneurs are struggling is that they don’t have the promise figured out? Do you have to start there?
It has to start there. It’s not that it’s not there. It’s usually needing a little massaging and tweaking, those small tweaks to change things. Let’s say you’re a painting company. For the longest time, your promise has been you deliver painting services, “We can get to you and get you done within two weeks.” Now, you’ve changed things, but you haven’t marketed that to all of your existing clients, or maybe people want things done in 1 day instead of 2 weeks. The world around you changes depending on the competition, but your business also changes depending on all of the things you’re doing, your team, your product, and all these different things.The old way is that every owner thought that nobody wanted accountability and that they needed to own the accountability. Click To Tweet
In the refinishing business years ago, when I first started refinishing bathtubs, our cure process was 72 hours. Now, you can jump in a bathtub after it is refinished after about two hours. That’s a big difference. If clients and people don’t know that you can offer these different services, think about the change in the way that’s all marketed.
This was several years ago, but nonetheless, it went from 72 hours, and then we got one-day cure products, then we got four-hour cure products, and now there are two-hour cure products. In a hotel environment, they could rent the unit the same day, which in the past, they had to close the room for three days. Think of all of these different things.
It’s your job as the owner to always be looking ahead and trying to find these new things to bring them into your core product offering so that you can then change and tweak that promise a little bit if you need to, to make it even better than all the other people in your industry to do that. You’re aligning, and you’re like, “Are you guys behind this?”
When you talk about our people component, it isn’t your ideal client and all that stuff. It’s your ideal team member like you talked about. It’s who aligns as far as the ideal people you want to work with, but it’s who you want to work with for your team and your suppliers. We’re always working through this, but how does that all happen with complete alignment to the promise.
You started talking about the painter. What’s going through my head is part of this is the target market, where your niche is, and the product selection. When you started, you said that everybody wants to improve their life. Whenever I’m buying something, I’m either buying it because I want something or buying it to change something I don’t want anymore. Those are the only two reasons I buy. I liked that you transitioned that into the promise.
One of the things that came to my mind is a market niche here. How much does niching play into this? If you’re a plumber, I know guys aren’t legally allowed to be in the business that is plumbers. I can get their card at the coffee shop. How are you any different? How much does niching and target market and differentiating yourself play in that promise?
It depends on your growth, aspirations, and things like that. Many blue-collar workers now are flat out there. They’re not looking for more work. They can’t contain what they already have. They can’t get the people on board to fulfill the needs of their clients. They may not be looking at the marketing side of things as much as they are, “I need to bring in more people.”
In order to bring in more people, you have to market to them. They have to believe that they can help you with your promise. Until your promise is super core and clear, that’s how you attract these people coming in. They’re like, “That’s the guy that does the one that the 2-hour cure, not the 72-hour cure. I think he is going to lead the way. I want to be part of that.”
There’s that alignment again that you’ve been talking about. It’s making sure it’s all aligned.
It has to happen right through all of these different states of your clients and your team. It’s the very same thing. When you have that alignment, you can then lose this whole idea of the Great Resignation because people are coming to you. They’re not leaving you. They’re coming to you. Your job as the leader is to continuously promote that promise every day, “This is what we do. This is why we do it.” I’m communicating all the time.
Everything centers around that promise. When you have the promise figured out and have made those tweaks and those adjustments, your product and people will be better. Imagine it’s going to impact your process so that you’re delivering to your clients or customers what you promised them. That promise is the center of everything. As an entrepreneur, I like this idea. We started this with you want to work with people that want to own their business, not have a business own them. This sounds huge. How do I make that first step? What’s the thing I got to do to start figuring this promise piece out?
We laid it out there. Understand what their problem is. Their problem may have changed. One of the problems we’re hearing a lot now is, “No contractor can get to see me for three months, let alone three days.” Can you design your promise so that you can deliver a three-day service? Think about the problems that you’re hearing on the phone every day. Understand the problems and find the structure to combat those problems because that’s going to lead you to the profit. You can do things in a different way that will take people through in the way they want it to happen.A customer’s problem may change overtime. You have to design your promise in a way to cater that change. Click To Tweet
One of the things when we ran our refinishing business for bathrooms and kitchens, was that we did a lot of commercial work. Not so much residential, but a ton of commercial work. We showed up on time every time. That was a core promise for us because almost all of my competitors would say, “We’re going to come in on Tuesday morning to do the bathroom.”
The property manager would give notice to the tenant, and the tenant would be taking their day off work and everything, and the guy wouldn’t show up. It was a huge frustration for the property manager that they were willing to pay a few dollars more to avoid because we weren’t the cheapest game, but we did show up every time, with rare exceptions. We ran 1,000 units a year, and I wouldn’t think we missed five a year after we had booked it.
That leads me to a question. That’s not one of your 5 Ps but is one of the pieces of marketing, which is pricing. You worked with a painter, and he’s like, “I’m not the cheapest gig in town.” He’d be double-digit percentages higher or 60% higher than the next closest bid, and he goes, “Here’s the deal. I can be there this month.”
That’s what I’m saying. That’s his promise.
People are like, “I will take it because I need to get it done this month.” How does pricing play into this? Where does that show up?
When you were asking about niching, you can niche your promise and affect your pricing depending upon that thing. When you’re as busy as you are right now, as most contractors are, everybody seems to be, so why not raise your pricing? You raise the pricing until you’re not busy. You’d be foolish not to.
That’s supply and demand.
If it gets slower again, you start rebidding some of your work and looking at some other stuff. It’s like, “I can afford to bring my price down from $1,000 to $900 because we’ve maxed our profit level,” which is that fifth P. You’re adjusting all these things, and that’s your job as the leader to be adjusting these things in order to create the business that you want.
Here’s the thing, when you got into business years ago, and you had this dream and freedom that you wanted, and you didn’t want to work for somebody else. What are those freedoms? Are they being delivered to you? Are you enjoying them? If you were working 50 or 60 hours a week, you might as well go work for somebody else.
It is true. There are a lot easier ways to make money than own your business. Let me ask you this. I’m a process and people guy. I’m sitting here thinking about this entrepreneur. They’ve been in business for a few years, making a good a couple of million dollars a year in revenue, but they are burning out. They are the first one in and last one out, missing their kids’ games and not spending time with their family. You know the drill. As you said, you got to get clear on this promise. Does the promise dictate the other 4 Ps, or do the other 4 Ps dictate the promise? Help me understand the order here.
It typically starts with the promise, and then you’re aligning your service or product, which is the second P to that. I will flip back to bathroom refinishing. My 72-hour cure product was cheaper than a 4-hour cure product. I could have aligned that to a promise, but my promise was I wanted to be in and out so they could use it in a day. With that, I’m using the higher-end product, and I’m charging a higher-end price.
Our Process, which is that middle P, the so important one, is different as well because it has to work with the whole thing. My process of even getting into that unit, aligning that unit, making sure that we get it all finished, cocked, ready, and all that stuff because before we’d go back the next day and rip off all the paper, cock it, and everything, so the process changed. It’s okay. The process has to align with the promise. The process is a very important piece that often precedes the people portion. That’s the big thing here. If the process is wrong, you cannot always get the right person.If your processes are wrong, you are not always going to get the right person. Click To Tweet
I’m 100% with you on that one. That’s why I say that the owners got to be involved in the recruiting process and engaging the people process because if the leaders aren’t involved in building the process, you’re never going to find the right people to run it. This is interesting, and you tell me if I need to change my belief on this. The two things that hold owners back from being able to enjoy the lifestyle they want and get out of the business are they don’t have a good process and don’t have good people to run their good processes. Those are the two things. If you fixed process and people, owners could enjoy a great lifestyle. Is that fair?
That’s fair. As long as it’s aligned with the promise, you’re good.
What’s something that our readers can do to start working on this process so that they can start getting some of their lifestyles back? We’ve already figured out the promise, product, and threw some pricing to make sure that we’re staying profitable. How do we do this process piece?
Think about your processes. There are a ton. One of the biggest problems is that in most small businesses and blue-collar businesses, a lot of the processes are still here, I’m pointing to my head. If the processes are in your head as the owner and not on paper, video, and in a way that all of your team can absorb and understand, then you’ve got some work to do.
That process is not only about how you deliver your product, good, or service. It’s how you hire, fire, bookkeep, and arrange your accounts receivable and payable. It’s all of these different things. They have to be specifically outlined in as much detail as possible, so anybody can read your process manual or watch the video when you’re not there and do it.
If it’s not at that level of process completion, then you still have some work to do. I can venture to say, as somebody who was in that business and works with that business, that most of the readers here have some of that in place, and a lot of it needs a little bit of help and work. Here’s another thing, it seems overwhelming. It’s like, “There is so much to do.” Don’t do it all. Start with one thing.
Start with your hiring process, the firing process, or your accounts receivable. It’s like, “I’m going to look at accounts receivable and my aging report every Monday morning at 8:00 and go through that, make my calls, or do whatever I need to do to make sure that the money’s coming in.” We all know that business fails based on cashflow. It’s a pretty important process to be watching what’s coming in every week.
All of these things judge the importance of the process. Start with those, the small ones that you can do to change the way that you run your business so that everything’s in alignment. If you change and tweak one little process a week, at the end of the next year, you’re going to have 52 processes tweaked, and that’s so much better than where you’re sitting now.
I read this in one of Mike Michalowicz’s books. I don’t know if you’ve read any of his books. It’s the Clockwork. He talks about how you get those processes out of your head. For all the readers out there, this is something I do too. Everybody has a camera now. We’re all videographers. Take your phone, set it up in selfie mode, get to work, think out loud, and record it. Send it to your team and go, “Here’s how I look at the AR report.” If you want your screen on it, have your screen on it. Record it and think out loud. There’s your process, and it’s documented.
Throw it in a G Drive that is shareable for everybody or something like that, and it’s there.
“Here’s the video. Go watch it. Is it perfect?” No, but I don’t think you’re saying it has to be perfect. It’s progress, not perfection.
There are no perfect processes, but we’re always trying to perfect them. That’s what I’m saying. I completely agree with you. Get something down, and you can go back and tweak it a little bit later. I don’t have any hair on the top of my head. I’ve already pulled it all out. I’ve been through this stuff. The big thing is there are so many easy tools now.Whatever happens, you need to be able to fulfill the process of your job every day. And it has to be in a position that somebody else can take it over. Click To Tweet
Loom is one of my very favorites. I send emails and stuff by Loom all the time. You can record yourself, your screen, and all of this stuff. It’s so simple. Download it and pop it into a G Drive that’s shareable for whoever needs it. Everybody can access it wherever they are. There are so many ways of managing the process. The biggest thing is that don’t let it overwhelm you. Start with something small and keep it going because as you’re aligning the process, you can align accountability. That’s where freedom comes. Until you have honed your processes, you can’t assign them.
Here’s another issue that I’ve had with one of my clients where she was saying, “I’ve hired a marketing manager, and she’s been a marketing manager before. I thought she was going to come in and run my marketing department.” Without any guidance or process of what was expected, there has to be a layout of expectations. You can’t assign somebody because they’ve done something before. There has to be involvement and a process there so that they can understand what you’re expecting of them before they go and do the work as well. There’s a bit of give and take around. You can’t assign accountability, and then see you later.
I tell entrepreneurs all the time that if you hire somebody and they fail within the first 90 days of employment, where they don’t meet your expectations, you need to look in the mirror and say, “It’s my fault.” They got to be onboarded. They have to understand what your expectations are. You have no idea what their prior work history was like or what the real environment was like.
I tell people all the time that past performance is not an indicator of future success because they might’ve worked for a guy who didn’t care. They looked awesome, but the company was bleeding. Their work looked awesome because nobody cared. Spend time with them. With those processes you’re talking about, as you said, a lot of times, the people or your team do care. Ask them for help.
I know it’s hard to do it, but it’s like, “Can you help me put together the AR process? Can you document what you do and send it to me?” I’ll be like, “I like that. Here are the tweaks I made.” You can leverage your team to build these processes in a way that you probably never thought was possible and get them done.
It’s something that I do. I don’t write a process for my team. They write the process. We go through it together and tweak it. I couldn’t have said it better myself. That is an awesome way to do it. What do you do every day if you’re not in it every day with them? Ask them, “What do you do every day?” List it down, do a little video, or whatever the case is because if you go away on vacation, things happen. If you have to take off a month of work because of whatever happened, we need to be able to fulfill the process of your job every day. It has to be in a position where somebody else can take it over.
When we talk about continuity and business structure, are you going to let down your promise because this one person broke a hip and couldn’t come to work for the next month? You have to think about some of these things and make sure that about your process and alignment, and after the process is the people. If you have the process down for that person’s position, who’s next in line? Do they know? If something happened to that person, has that person next in line ever done any of that? Have you let them go through the process once or twice so that if they ever had to do it, they’d know how to do it?
You’re talking about a third person or somebody else, “What if it’s me as the entrepreneur and I break a hip and got to be out for a month? Is business going to go under?” If you can’t walk away from your business for a month to take care of whatever, you’re never going to sell it. No one’s ever going to buy that business because they don’t want to buy a business from someone that’s created a job. They don’t know what that is. I love how you break this down. The thing that’s different for me is it starts with that promise. Once you’ve got the promise figured out, you build everything else around that. That’s great. Your book’s coming out later this 2022.
I’m working for a fall release, either September 1 or October 1, 2022.
You’ll be reading this well before the book comes out. Make sure to check that out, but for people that are, “I want to know more about this,” how do they get ahold of you? You’ve got a free giveaway for our readers as well. Tell me about that.
The best way to catch me is on my website. It’s called SimplifyingEntrepreneurship.com. That’s where you’ll find the free download. It’s an assessment. It’s right on the top right-hand corner of the website. The assessment is a great tool, and it takes you about 12 to 40 minutes. It’s multiple-choice questions. At the end of that, depending on how you answer it, it spits you back to a 50 to 60-page PDF document. I love this idea of green and red lights as far as dashboarding stuff.
It’s green-lighting the stuff that you’re doing awesome with. It’s giving you a pat on the back. It’s red lighting some of these other areas you might need to think about and things you want to work on over the next year. It gives you clarity on where you should focus, what you should be doing, and what you’re doing well. From that perspective, it’s a great spot to start your learning, ideas, and the flow of the different things you need to do to improve your business. Whether you’re hiring Ryan, me, or any other coaches out there in order to help you with that stuff, that’s the idea here. Get those things going.
I love that you’ve got a tool in place that they can know, “What’s the next step I need to take?” This doesn’t get solved overnight. If your business is draining you, you’re exhausted, burnt out, and like, “I want to get out of it,” as you said, a lot of people sell their businesses or want to sell because they don’t want it anymore.
It’s like, “I’m tired of this. I don’t want to do this anymore.”
It’s great that you’ve got a tool there. They could probably even reach out to you through your website and say, “I’d love some help.” I’m sure you’d coach him through some things. Pete, so much information packed in this episode, those 5 Ps, and how we broke it down. I enjoyed it. I thought it was great. Thanks for being a guest on the show.
It’s been a pleasure. Thanks for having me, Ryan. I enjoyed our conversation.
About Pete Mohr
Helping Entrepreneurs create turnkey businesses that give them more freedom! | Podcast host and guest | Entrepreneurial Speaker | Retailer