What Small Business Owners
Can Learn from Franchising

by Ed Teixeira

Do you ever feel like your business will implode if you aren’t there to watch over it? Are your days off interrupted with phone calls from employees or customers? Afraid to expand because you don't have competent management? Find out how the concepts of franchising may hold the answers to these problems.

Do you ever feel like your business will implode if you aren’t there to watch over it? When you take a day off or a rare vacation, are you constantly interrupted with phone calls from employees or customers? Have you considered expanding your businesses but were wary to proceed because you lacked competent management?

If you have, you’re not alone. Small business is all about innovation. But often the information about what makes a business tick is locked inside the owner’s head.

So, what can you do about it?

The answer to these problems may lie with the concept of franchising.

Franchising the most dynamic business model in the world generates over 1.5 trillion dollars in revenue and millions of jobs in the U.S. alone. On a worldwide basis franchising continues to grow in popularity. From China to Kuwait franchising is expanding and in many cases importing U.S. brands. Wherever a person travels there are franchise businesses. From tutoring services for our children to food for our family there is virtually no business that hasn’t been franchised.

If franchising has become such a successful business model can we learn from this success and apply the results to other businesses? The answer to this question is a resounding yes!

There are certain fundamental principles of franchising that make it rather unique. By applying some of these principles to your business it will operate more efficiently and you’ll become a more effective and resourceful business owner.



These franchise principles include:

  1. An attractive service or product with a common brand with trademark protection
  2. The processes for running the business can be systematized
  3. When guidelines and procedures are followed success typically follows
  4. There is a strong emphasis on marketing and brand promotion
  5. Standards of quality are established for the franchisees and they are enforced
  6. Franchisee performance is evaluated on a regular basis
  7. Franchisees are recognized for outstanding performance

These same principles can be applied to an independent business. The approach I recommend is to organize and construct your business to operate as if it were a franchise. Establishing a franchise operation is a complex project however; I’ve simplified the process.

Here are the steps to follow:

1. If your business has a unique name with potential future value you should trademark it. This will protect you from competitors or copycat operations.

2. Set up a simple operations manual which details each component of your business.

This doesn’t have to be complex. You want to document the important components of your business. You’ll have your business operations in one manual for training and employee reference. You can do this yourself or engage a qualified professional. The objective is to write your manual as if it were going to be used by a franchisee.

The manual’s table of contents would look like this:

  1. Description of your business
  2. Location set-up
  3. Products and supplies
  4. Recommended inventories
  5. Quality and customer standards
  6. Customer service
  7. Personnel and human resources
  8. Marketing and Sales
  9. Bookkeeping
  10. Public Relations

3. Follow consistent policies for recruiting, screening, interviewing and hiring employees. Have job descriptions. In addition establish specific policies for employee evaluations and salary reviews. Adhere to work schedules, which are equitable for all employees.

4. Have a mission statement for your business based upon your market. Establish a marketing program for developing and growing your business. Organize your marketing and sales activities so that all of your employees perform these tasks the same way. Don’t leave anything to chance.

5. Have a simple disaster recovery plan for bad weather or other events, which would make it difficult for your employees to get to work or prevent your business from operating.

6. Establish sales goals for the business and have incentives for your employees. These could be inexpensive prizes. Have meetings on a regular basis to maintain communications with your employees.

If you follow the steps above and run your business as if it were a franchise, your business will run more smoothly. Employees will know their jobs and also understand how each employee contributes to the successful operation of the business. And, that will give you more control over your business, resources and time.


© 2005  Ed Teixeira

Ed Teixeira is author of Franchising from the Inside Out. Ed has over 25 years of experience in the franchise industry. He has held executive positions with a number of leading franchise companies in industry sectors including manufacturing, retail and healthcare. Ed was also franchisee of a multi-million dollar healthcare operation with six locations. Visit his site at http://www.franchiseknowhow.com.

 
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