Business is simple. We are the ones who make it hard.
Every business, regardless of size or industry, runs on exactly three domains: Product, Customer and Finance (Point16 calls this PCF).
Product is what you sell. Customer is who you sell it to. Finance is how you make money from it. Everything else is decoration.
If your results are not what you expected, both the cause and the cure sit in one of those three areas. There is no fourth thing.
Business is a commercial activity involving the exchange of money for goods or services.
Sharp, that. Nicely put. I stole it from the dictionary.
But that really is all business is. Everything after it is decoration.
There is genuine complexity out there, no argument. There are also complicated tricks, three-letter acronyms, and an entire vocabulary invented so somebody could charge you for translating it. I am aware I run an advisory firm and have opened by telling you most business advice is noise. Stay with me. I am about to give you a three-letter acronym of my own, so we are all compromised here.
You have Googled this already. You have read the Business Made Simple listicles and the Top Ten Lessons posts from people considerably more famous than me.
Here's the thing: those guides are not simple, and they are not complete. They are "I wish I had known" tips from very smart entrepreneurs, and every one of them should be retitled "The mistakes I made getting started in business, recounted with hindsight and excellent lighting."
At the core of every business, whatever it sells and however big it gets, are the same three things: Product, Customer & Finance. We call it PCF, and it’s our first Business Principle.
The complexity people feel is what gets built on top. But at the core it’s always simple.
Product: What you sell
Whether you make it, import it, resell it, or provide it as a service.
Portfolio architecture, lifecycle positioning, value delivery, lean, agile, "our proprietary methodology". All of that is either a description of the thing you are already holding, or noise about it.
Customer. Who you sell it to.
Know who your customer actually is, and talk to them like a person. Whether your business model is B2B, D2C, ATL, BTL, subscription, freemium, perceived value the customer is at the core.
Brand equity, funnel optimisation, multi-channel orchestration, whether the logo should be sage or umber. Is all noise. (I’ve sat in the logo meeting. Twice. I contributed enthusiastically both times.)
Finance. How you make money from it.
Take in more than you send out. That is a profit. Profit is a good thing.
Tax, EBIT, NPAT, gross margin, gearing ratios, EBITDA "adjusted for one-offs". You can guess. All noise.
And that is it. Product, Customer, Finance. There is no fourth thing.
Whether you are starting something, buying something, growing something, or trying to restart something that has gone flat, it comes back to the same three domains every time. If your results are not what you expected, both the cause and the cure are sitting in Product, Customer or Finance.
The starting point for uncomplicating your business and unlocking growth is with these three.
What is your product, and is it adding value?
Who are your customers? Do they know about you, and do they want to buy what you are selling?
Are you making money from it? Is the price right?
Business is simple. It is not easy. But keeping it simple is the only reliable way to achieve more easily, and unlock your business growth.
Frequently Asked Questions (FAQs)
Q: What is the Point16 PCF framework?
A: PCF stands for Product, Customer and Finance. It is Point16's principle and framework for the three core domains every business runs on, no matter its size or industry. Product is what you sell, Customer is who you sell it to, and Finance is how you make money from it.
Q: Why is my business not growing even though I am working hard?
Almost always, the answer sits in one of three places: what you sell, who you sell it to, or how you make money from it. Owners often keep pouring effort into the part of the business they enjoy or came from, while the part that is actually holding growth back gets ignored. Working harder in the wrong domain will not fix it. Find the weak one first.
Q: How do I work out what is actually wrong with my business?
A: Start by asking three simple questions: is your product adding value, do your customers know about you and want to buy, and are you making money at the price you are charging? Whichever of the three you answer weakest on is usually where the real problem, and the fix, is hiding.
Q: Does PCF apply to every business, not just companies that sell physical products?
A: Yes. "Product" covers anything you sell, made, imported, resold, or delivered as a service. The same three questions apply: what are you selling, who are you selling it to, and are you making money from it. The framework works the same way regardless of what you sell.