Further analysis of the people, process, product categories

I’ve previously written about Marcus Lemonis’ big picture for businesses, and how he uses it to solve a particular problem. I’d like to extend this now into a more general problem-solving process.

There’s an implicit hierarchy in People, Process, Product, with the business owner and employees on the People side and the customer on the Product side. The customer has no economic, a priori interest in Process or People, and likewise the sellers have no economic interest in Process or Product. For this reason, I’ve decided to analyze the prerequisites for a transaction like so, using the seven question words as a mnemonic:

People -> Process -> Product

People: Why?
People -> Process: Who?
Process: Where/When?
Process -> Product: How?
Product: What?
(Customer): How much?

1. People: Why?

What’s in it for the people running the business? What emotional needs are they satisfying in themselves by selling the product? This is arguably the most important to understand clearly, the easiest to do, and the most neglected aspect of determining whether a business idea is both viable and plausible.

2. People -> Process: Who does what?

This is tasking, project management, tracking and documentation, and discussions of liability and profit-sharing.

3. Process: Where/When?

Logistics. “If you don’t know your numbers, you don’t know your business.” Every logistical process needs to be represented as a verbal description, a picture (generally a flowchart or a lookup table), and a couple of numbers detailing costs and time to completion. The larger a business scales, the more important it is for these numbers to be formalized, exact, and easily referenced.

4. Process -> Product: How?

This is basic problem solving and it’s where most small business owners spend their startup costs and planning time and energy. To make products A, B, and C, you need capital assets X, Y, and Z, and people who know how to use them. This is also where safety, legality, and regulation overhead come into play.

5. Product: What?

Self-explanatory. Read Josh Kaufman’s book if you haven’t already.

6. (Customer): How much?

Business analysis, pricing, and receiving orders.

If you want to really work that brain muscle, try conceiving of this as a two-way process. After all, in every (consensual) economic transaction between two parties both parties are receiving something they want and giving something for it. That means you’re both a seller and a customer in every exchange, so you can approach each transaction from both ends of this flowchart.

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About Aeoli Pera

Maybe do this later?
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11 Responses to Further analysis of the people, process, product categories

  1. Edenist Whackjob says:

    I like this direction. Maybe you could hang out on Hacker News more. Absorb code and business by osmosis.

  2. glosoli says:

    This post makes me feel ignorant, lazy, and blessed.
    #wingingitfor8yearssofar
    #thalfranchiseidea

    • Aeoli Pera says:

      Eh, you read the right books in high school and college. I read SF/F, didn’t know any better when I got some bad advice, and now I’m in debt up to my eyeballs. What you don’t know will hurt you, but sometimes the timing matters more..

  3. lflick says:

    Hey, what’s the best way to exchange information with you, in private and with low latency? I’m trying to figure out my movements over the next 48 hours.

  4. bicebicebice says:

    Being a Businessman = People will love you.

    Being a Merchant = People will hate you.

    I bought this from a Business, empowering. This was sold to me by a Merchant, undermined, race war now gas the bikes. Buyer and seller must be happy with transaction = white goodly altruism = The Pub. The Seller wants what he sold to the Buyer.

    Imagine a salesman for Honda driving a Ferrari, or Cokemen drinking Pepsi.

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