What Small Business Owners Can Learn From Franchising

WHAT SMALL BUSINESS OWNERS CAN LEARN FROM FRANCHISING By Ed Teixeira As a small business owner how often have you felt like your business would implode if you weren’t there to watch over it? How many times have you taken a day off or gone on vacation only to be constantly interrupted with telephone calls and questions? Have you considered selling your businesses but were wary to precede because you weren’t sure if your business was in the right condition to appeal to buyers? Chances are you’ve had to face these issues at some point in time.

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. Consider the services and products that we purchase from franchisees. From tutoring services for our children to food for our family there is virtually no business that hasn’t been franchised.

Every day countless small business owners consider franchising as a way to grow their business and achieve their financial dreams.

There is a certain allure to franchising yet most small and medium size businesses continue to operate independently.

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 table of contents would look like this:

a. Description of your business b. Location set-up c. Products and supplies d. Recommended inventories e. Quality and customer standards f. Customer service g. Personnel and human resources h. Marketing and Sales i. Bookkeeping j. 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.

The benefits of franchising can be applied to independent businesses. When properly applied this exercise will result in a business that can be operated by employees who know their job and understand how each employee contributes to the successful operation of the business.

Another option is to operate your business as a true franchise. Bridge can determine if your business qualifies and what it takes to be a franchise.



Copyright 2006, FranchiseKnowHow, LLC

What Small Business Owners Can Learn From Franchising - To learn more about this author, visit Ed Teixeira's Website.

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