THE POWER OF THREE EQUATES TO A FORMULA FOR SUCCESS

I'm a true believer in the power of threes. After all, triangles give bridges strength, tricycles give toddlers speed, and according to my mentor, it takes starting three businesses to be a true entrepreneur. And when I started my third business and thought about what had made the others successful and how we could make the businesses we consult for successful…it all kept coming back to the same number…three.

So how does the number three play into the formula for building a successful business? There are three areas where entrepreneurs can focus their time and energy to best insure their business' chances for success. I gave it a formula to make it easier to remember: PS².

PS² = Personnel Productivity * Strategic Planning * Sales Performance

Here's how each area plays a roll in the business' success.

Personnel Productivity. Successful entrepreneurs understand that you can't create or run a profitable business alone. They get their most valuable resource, their employees, excited and involved in planning, executing and achieving the goals of the company.

This is true not only of small businesses, but larger ones as well. I'm impressed when I read about CEOs of large companies that are still involved in the final approval when hiring a new job candidate. They know that happy employees (and only happy employees) who fit into the company's culture and are motivated to accomplish the company's goals are the key to success. And they understand that this mindset has to be driven from the top down.

So ask yourself if you're focusing time and energy on this important area.

• Can you verbalize your company's culture and determine if a candidate is a good fit for it?
• Are you asking the right questions during interviews?
• Do employees understand their specific goals and their role in achieving the goals of the business?
• Are motivational and incentive programs in line with corporate goals?

By hiring and retaining the right people with the right skills and using the right incentives to get the job done, entrepreneurs can quickly build successful businesses.

Strategic Planning. Simply stated, strategic planning is the roadmap of how to get your company from where you are to where you want to go.

Let me put strategic planning in perspective. I had an appointment in Mount Washington the other day and I don't know that area very well. I probably could have found the place by driving up and down the winding hills a couple of times, but then I thought that might make me late for my appointment and my prospect would think that's how I did business. And I remembered I wasn't all that great with my clutch and those hills where steep. So I found directions on the internet. They even told me approximately how long it would take to get there. I don't encourage searching the World Wide Web for directions on how to plan for your business. But by simply planning ahead and doing some research I saved myself time and maybe a client. Yet many entrepreneurs run their businesses without basic directions by not having a business plan, a budget and goals.

Through my many experiences in my own businesses and consulting to other businesses, I've found that strategic planning is most successful when done with an objective viewpoint. We all know that as entrepreneurs our businesses become a huge part of our lives and we get very attached to them. So take a few steps back from your business or go off-site and really analyze where you've been, where you are and where you're going. If you can't be objective, bring in a consultant to help you take a fresh look at things. But in any case, make sure you objectively:

• Analyze your financials.
• Compare your company to others using industry benchmarks.
• Talk with and listen to your customers.
• Understand your break-even points.
• Identify and quantify your goals.
• Plan for what needs to be done and when.
• Plan for who will do it and how.
• Budget for the resources that you'll need to achieve your goals.

And before you know it, you'll have a roadmap that will get you to your destination in a predictable amount of time. But don't forget that even the best of plans need to be checked and adjusted need to be made along the way. Even internet directions give you a bad turn every once in a while.

Sales Performance. Sales performance deals with executing the plan and achieving the results you desire. The success of all businesses, from consulting to making widgets, hinges on the ability to sell what you're offering.

Now I'll assume you've done your research in your strategic planning and your customer really needs what you have to offer. So it's time to focus on your sales goals. I don't mean you should go out and sell (although that may be necessary), but as the entrepreneur, you need to have a thorough understanding of the key components of sales.

Just like strategic planning, sales performance must be tracked and analyzed with an objective viewpoint. I've managed a lot of sales people and one of my businesses was a professional sales organization. One essential component is self confidence. But it's a two-edged sword. Self confidence can lead to overzealous forecasts and is prone to erroneous assumptions about why the sale didn't close. So as the entrepreneur, track and analyze sales progress with the most objective information you can obtain. You should have a clear understanding of:

• How long and what are the stages of your sales cycle?
• What sales have been successful and why?
• Why have some sales failed?
• Does your forecasting tool and pipeline process give you the ability to accurately predict revenue?
• What "one thing" does the sales force think it needs to be more successful?

And don't just track and analyze sales performance, use the information you acquire to improve it.

So these are my "three" cents on the formula for a successful business. Once you've performed each step, make sure you continue focusing your time and energy on improving each of the areas. You'll find that they're tightly intertwined and the success of one will feed into the success of the others. And you'll find that you can plan to engage your business by remembering the formula for success, PS².

Sue Parker and Debbie Ferlic are the founders of PS² Engage, LLC, a consulting firm focused on helping entrepreneurs and small businesses thrive. Through the startup, growth and sale of their previous businesses, Paragon Solutions, Inc. and OPSoft Technologies, Inc., Sue and Debbie have gained unique and invaluable experiences and the front-line knowledge necessary to help their clients succeed. Sue and Debbie have been recognized as business leaders through Entrepreneur of the Year Finalists in 1997 and 1998, the Pittsburgh Technology Council Technology 50, Pittsburgh Business Times 100 Fastest Growing Companies and the Small Business News "Who to Watch".