"Scaling Success: The Small-Town Business with a Franchise Heart"
How to Build Your Small-Town Business Like a Franchise for Long-Term Success.
Thanks to eight votes in Congress, franchises are legal.
Many during that time thought franchises were a type of Ponzi scheme where those at the top got all the money and the business owner got the shaft.
History, thankfully, has proved that wrong.
Franchises are often hailed as a resilient and profitable business model.
Statistics show that over 95% of franchises operate successfully even after five years, whereas only 15% of traditional businesses manage to do the same.
While many of us may not have the financial means to buy into a franchise, there are valuable lessons we can learn from them to improve our businesses.
In this article, we will explore how to utilize operating manuals, organization charts, and budgets to build a successful business, following in the footsteps of franchises.
From Self-Employment to Business Ownership
When starting a business, many individuals rely on skills acquired from previous employment.
They become self-employed, essentially holding a job rather than owning a business.
This practice often leads to long working hours, high stress levels, and personal and financial challenges.
It's no wonder that within two years, more than 80% of these self-employed individuals end up closing their doors and returning to traditional employment.
The key issue lies in the focus. Most small business owners prioritize the work they provide, whether a product or a service, rather than building a business that can sustain and support that work.
Successful companies, on the other hand, are customer-driven rather than product-led.
Going Back to Basics
So, what defines a successful business? It can be described as a "money-harvesting machine."
To create such a machine, one must consider three essential components: a marketing/sales leg, a production leg, and a financial leg.
These three elements must work in harmony to attract and satisfy profitable customers.
Building a business requires careful planning and organization. One powerful tool to aid in this process is an organization chart.
By creating a visual representation of how you envision your business to look in the future, you can better understand its structure and identify the necessary steps to achieve your goals.
Initially, your organization chart will have three legs, but as you grow, you may add a fourth leg to replicate your successful prototype.
The Marketing Machine
Every successful business begins and ends with the customer. To delight a specific group of people, you must truly understand them.
Dive deep into their psychographics, uncovering what motivates their purchasing decisions and how different stimuli, such as colors, impact their reactions.
Market research becomes an ongoing function, and you should constantly strive to improve by asking, "What can we do better next time?"
Develop systems like questionnaires or suggestion boxes to gather valuable feedback. (See: HOW TO MAKE FRIENDS AND TURN THEM INTO CUSTOMERS)
The Sales Machine
No matter how exceptional your products or services are, your business will struggle if you can't sell them effectively.
Advertising alone won't bring in customers; you need a well-oiled sales machine to turn potential shoppers into loyal customers.
Determine the number of monthly advertisements, letters, or leaflets you must send out to sustain your business.
Consider the example of a Sales Director who developed a system to track his team's daily activities.
By implementing a report form, he could monitor their progress and identify areas for improvement.
This system became the foundation for training new salespeople, significantly reducing their training time and improving overall sales performance. (See: How to Sell The Benefits of Your Product or Service)
The Production Machine
Ray Kroc, the mastermind behind McDonald's success, was astounded by the McDonald brothers' ability to create a well-oiled hamburger restaurant that delivered consistent quality and high sales volume.
Kroc took their concept further by turning McDonald's into a global franchise.
Running any business, including a McDonald's, can be likened to a performance.
Developing an operating manual and checklist ensures your business operates seamlessly, even with different employees.
Don't be discouraged by the idea of relinquishing control; instead, see it as an opportunity to build a business that can thrive without your constant presence.
The Finance Machine
Managing finances is often an overlooked aspect of running a business. However, it is crucial for long-term success.
Implement a simple computer program that transforms financial data into visual representations like pie charts and graphs.
This will allow you to visualize where money is coming from and where it's going.
Budgeting is also essential; use a program (such as MS Office or QuickBooks) that tracks your progress, showing you how much is left until a given period ends.
This control information is vital for steering your business in the right direction.
Duplicating Success
Once you have built a successful prototype and ironed out any issues, it's time to replicate your business.
Start from the bottom of your organization chart and fill each position with a capable individual.
Please provide them with an operating manual or checklist to ensure consistency.
As the business grows, consider expanding to new locations, duplicating everything from the color scheme to the processes and systems.
You can choose to franchise these recent locations or hire managers to oversee them while you focus on expanding further.
Franchising your business offers financial advantages and motivates franchisees to grow the business.
Seek guidance from organizations like the US Small Business Administration to explore this option further.
In conclusion, franchises have honed their strategies and systems to create successful businesses.
By learning from their approach and implementing business-building tools like operating manuals, organization charts, and budgets, you can set your business up for long-term success.
Embrace the lessons of franchises and build a company that can thrive independently, giving you the freedom and financial rewards you desire.
Thanks for reading, and I hope this article helps you grow your small-town business. Please take a moment to select a free or paid subscription.