The secrets to running a successful franchise are the same for running a successful business…except they aren’t secrets. As a speaker and one-time franchisee himself, Scott Greenberg has spoken to thousands of franchisees, and he shares his observations in this helpful book.
Have a Clear Head
“But the franchisee needs the best they have to offer, every day. Succumbing to their human vulnerabilities, even subconsciously, is bad for business, so they make self-improvement a priority.”
While “it’s just business” is offered as a truism, it’s not a sentiment shared by many of our sellers. Indeed, a business is one of the most significant emotional investments anyone makes in his/her life. The upside of that is that it can get your attention and focus. The downside of that is that it can be prey to your worst tendencies and habits.
Business ownership is personal development. Self-aware business owners will not blame others for their faults and failures, but will look internally to see how they can improve. When you get angry or frustrated or even depressed at customers, employees, or vendors, look within first to your own reaction, then relate it to the systems you’ve built (or failed to build). While building a business is an emotional process, emotions should not rule the way you build a business.
Know Your Numbers
“One franchisee who came to me for business coaching took a month to generate a (supposedly) accurate P&L report for us to review. Like so many franchisees, she just had too much to do to worry about bookkeeping.”
Not so long ago we spoke to a developing franchisee who had had his business for more than a year and was doing $30k a month in topline revenue (he’s now doing about $50k) and when we asked about the state of his business, he said, “I’m not even sure if I’m profitable yet.”
That sort of response elicits laughter and horror. Laughter, because how could you possibly know what your profitability is without knowing your numbers, horror, because how could you not know your numbers?
While many business owners who are in the trenches in their business could pass a pop quiz within reasonable metrics as to what their revenue or payroll is, quite a few can’t tell you what their profitability is, and that’s down to not having clear and accurate financial statements at hand. While the gold standard is to have at least monthly statements so you know what’s going on at every level in your business, without quarterly statements you really are clueless about what you’re doing well and what you need to improve.
Know What Business You’re In
“Most franchises don’t understand what business they’re really in. They think they’re selling cheeseburgers, lawn services, or plumbing. These are the products or services they offer. But in every case, there’s something more beneath the surface — something that affects customers at a deeper, emotional level. Understanding what that thing is will directly impact your bottom line.”
We know franchisees who understand what they are really selling. Ben Davis of The Gents Place told us he’s not really selling haircuts, but a feeling. “When men look and feel their best, they perform at their best: that’s what we help them do.” Neel Parekh from MaidThis, a remote cleaning franchise, knows he’s not selling cleaning, but peace of mind: “People love to come home to a clean house, and not have to even think about how it got that way.” Scott, who was himself an Edible Arrangements franchisee, knew very early on that he wasn’t selling cut fruits and chocolate, but feelings of love and appreciation that those cut fruits and chocolate could deliver.
Ask your most loyal employees what they love about working for you and why your most loyal customers keep coming back. Almost certainly, your product or service will be part of the answer, but it’s what’s behind or beside or on top of that that keeps them engaged with you.
Are you thinking of buying a franchise or another type of business? Give us a call. To see the other books we’ve covered in this series, click here.