5 Lessons Your Business Can Learn From Franchising
Franchises, you either love them or hate them.
Some, like Michael Gerber (The E-Myth), love the systems-oriented philosophy of them, the ability to build a well-oiled machine that can be replicated over and over again. Others, like Seth Godin, see them as a path to eternal mediocrity, never to produce anything beyond “ok”
How about a middle ground?
You can have set processes and systems in your business and still retain your originality. Why not take the best parts of franchising for your business and leave the less desirable parts behind?
I like that idea.
For most businesses, the biggest bottleneck to growth is the business owner. All of the experience, the knowledge and know how are forever trapped inside their head, only leaking out in trickles in the form of unorganized employee training and knowledge transfer. It's never enough to satisfy the standards the business owner has set, so in frustration, he resorts back to doing everything himself. That is the day his business stops growing and begins to die.
Eventually this leads to burnout, disappointment and growing frustrations with the business. The business owner gets tired and worn out from bearing the never ending burden of doing everything himself.
Franchises have the ability to grow and replicate themselves for the sole reason that it's success does not depend on the owner of the business to succeed. It depends on a system, a way of doing business. It is the system that is implemented and improved over time and the people in the business need to learn how to work the system as efficiently as possible.
Take a look at 5 things your small business can learn from franchising and see if you can apply some of these concepts to your business.
A Written Plan
Ever play the game “Telephone”? It's when you whisper a message in someone's ear, and that message gets repeated along a line of people…..until the person on the end has to recite the original message. It's almost never the same message at the end as everyone along the chain gives their interpretation of the original message, often with humorous results.
When you don't have a written plan for your business, that's what you're doing, playing telephone with your employees. Your verbal instructions are not remembered, interpreted differently, or just forgotten…….leaving your employees with varying levels of understanding.
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Do you see the confusion here? Do you see why everyone does the same activities …differently? Some may do a great job, others a mediocre job. That's not fair to the customer who gets the mediocre customer experience, it's not fair to the employees who are expected to perform without proper training, and it's not fair to you, the person who busts his butt trying to build a business.
Having a written operating manual for your business can help to standardize your best practices. Every employee has access to the same knowledge, the same method to perform the duties that make up their position. With a written plan, you take the time once to lay out the way you want things done. This gives every person in your business the same view of how you want things done. Much easier on you and easier for your employees to understand and reference as needed.
It also allows others in your business to train new hires as the way your want the business run (your system) is now on paper, in an organized fashion for everyone to see.
It's nice not getting a call on a Sunday morning because your employees were able to go through your step by step guide on how to reboot the credit card terminal because it froze.
Strong Branding
Whether you like them or not, when you see the “Golden Arches”, you know exactly what's in store for you. I'm not a fan of eating fast food, but when you're driving cross country with 4 kids in the car, spotting those golden arches on the horizon is like finding an oasis in the desert.
Wouldn't it be great if people saw your logo and got all warm and fuzzy inside just thinking about their last visit to your shop? A strong brand can do that for you. Franchises understand the importance of branding. Every customer touch point is carefully designed to remind you of who they are as a company and what their brand stands for.
You won't see a good franchise substituting black and white brochures they made on their laser printer because they ran out of the color ones. But I've seen that countless times from independent business owners who thought it was no big deal to cut a little corner like this. Letting your phone always go to voicemail, closing earlier than your posted hours, not responding to customer communications, these are all little things that slowly eat away at the quality of your business.
All of that little “corner cutting” turns into a deterioration of your brand. Keep your branding strong, even if it hurts the pocketbook in the short run.
Consistent Marketing
Franchises understand the need to constantly feed that machine that is your business. Without new potential customers coming through your door, you're business will eventually wither away and die.
Most business do the same thing. When things slow down (revenue), they cut everything, including their marketing. 
Franchises understand that even in tough times, you cannot save money by cutting your marketing budget. This is something independent small business owners do all the time. In tough times, they look to save a few dollars here and there, and it's easy to not place that ad next month or to freeze your Pay Per Click campaign for a month or two. You don't see the results of you decision until several weeks later, when you realize that the phone has stopped ringing and nobody new is walking through your door.
oops.
Never stop marketing. Never lose sight that even if you are busy now, if you stop marketing, the pipeline will run dry.
Most franchises mandate that their franchisees spend a certain % of their revenue on marketing activities because they understand the importance of constant marketing. They also know if they don't mandate it, it's very easy for a franchisee to decide to save a few bucks one month and cut their marketing spend.
Even if it hurts in the short run, don't turn off your advertising and stop marketing, it'll hurt you even more in the long run.
Standardized Training
When you hire a new employee or train your staff on a new product or service, how do you do it? If you're like most business owners, you do it verbally, and when the owner feels like it or when someone screws up. It might be a team meeting or one on one, or just a “watch what I do” kind of training. What happens to the employee that was away that week, or the new employee you hire next month, do they receive the same exact training? Probably not.
Good training can be exhausting. Often, after you've done the same training for several employees, you start to cut corners, leaving out little tid bits of insight that might be crucial for a new employee to “get it”.
This is also why the your employees do the same activity, differently. They've all received the training, only it was slightly different, and left to them to fill in the blanks with their own interpretations. This is why your business lacks consistency.
It's important to write things down so you don't forget the important stuff. It also allows you to train a manager or key employee to help with the burden of training everyone yourself.
A good franchise will have a detailed training manual so the employee hired today is trained the same exact way the employee hired next month will be. The next time you set out to train a new hire, bring along a pad and pen and document everything you do so you can refer to it again for the next hire.
Understanding Of Key Metrics
Do you know what your KPI's are?
If you're not sure what these are, you're playing darts in the dark.
Your Key Performance Indicators (KPI's) are the key metrics that you look to measure of success for your business. It's a “snapshot” you can look at and get a quick feel if things are going well or if trouble is potentially brewing. Every business has different KPI's, but everyone has them. Examples of KPI's are:
- The number of leads generated each month
- New customers acquired each month
- Number of sales calls made each month
Franchises know their key metrics cold. They have the advantage of amalgamating the metrics of hundreds or even thousands of individual units and gaining a deep understanding of what metrics are important and where they should be for a successful franchise location.
Find out what your important metrics are and write them on a whiteboard in the office so you and your team can see them every day.
What else can you learn from franchising?
As you can see, having your processes and training in written form will go a long way in creating consistency for you business. It'll also allow you, the business owner, more time to work on the bigger things for you business. Keep your branding strong and your marketing consistent to avoid pitfalls many small business owners make.
Don't slack off or cut corners, even when you think it's not a big deal. A strong business and brand takes a long time to build but can be ruined by poor decision-making and training.
Gary
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