4.
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"Business Growth Tip"
Today's SOHO Help Desk is from a guest contributor to
DEMC E-Magazine. Nicholas Bibby is a principle of the
Bibby Group, an international franchise consulting firm.
He has put together a tip on evaluating your business for
franchise growth. While the focus of his article is on
franchising your business, I found his insights are also
very applicable to understanding what is needed if you
want to expand your business with an affiliate program.
If you have a valuable tip, promotional idea, question
or answer you would like included in an upcoming issue
of DEMC, all you have to do is submit it by email to -
mailto:helpdesk@demc2.com
=== Business Growth Tip ===
From: Nicholas A. Bibby
The Basis of Franchisor Staying Power
- get going on the right foot.
Although it is potentially the greatest business growth
vehicle ever invented, franchising, if not done correctly,
has the highest mortality rate of all businesses.
"Bibby, give up whatever you're drinking, because we all
know that franchises generally have good track records."
Well, that's mostly true, but actually I'm not talking about
franchisee start-ups of good systems, I'm talking about
start-up franchising companies.
No one can report with any accuracy how many
franchisors there are in North America, let alone the world,
but depending on where and how one researches the
subject, and what data you choose to believe, the total
count ranges from 3,000 to as high as 5,000. Yet, by the
time you list the 500 or so "best of breed" type rankings,
it's pretty hard to keep adding names; at least ones that are
recognizable. OK, throw in the regional brands and
"controlled growth" guys and you will be lucky to dig up
another 1,000. So what happened to the other 50 to 80%?
Obviously they aren't around; they ran out of franchise gas
long ago, but the big question is WHY?
Well, the reasons why franchisors fail could fill more space
than my PC has memory, but I want to focus right now on
just one issue that brings down franchisors and
unfortunately, franchisees along with them. This single,
deadly serious virus can be intentionally or unintentionally
inflicted upon participants. It is a sickness that franchisors
may or may not know that they have, and it most definitely
is one that franchisees, especially first timers, would not
even remotely suspect. After all, it's a trusted franchise,
isn't it? And that, of course, means the "federal
government" has scrubbed it clean; doesn't it?
Sorry folks, just because a start-up franchisor has met
federal disclosure guidelines, doesn't necessarily mean that
the franchisor knows where it is going, how it's going to
get there, or how it's going to keep its membership healthy.
Franchising requires knowledge of the core business
concept being franchised, but also a firm grasp of how to
take franchisees from a training program to real world
success. That sounds simple, but it isn't. Here's why.
Most franchises are born of entrepreneurs with an
enormous depth of independent spirit and drive to win. As
I've mentioned in other commentaries on entrepreneurship,
there are distinct "types" of entrepreneurs, and only one of
them is the ideal franchisee. The independent entrepreneur
who, after years of grueling mental, physical and emotional
hard work, decides to franchise their "brain child," has by
design, luck or just shear will, overcome all the obstacles
that stood in the way of success.
For the most part, the "me against the world" spirit found
among franchise system founders is not found in
franchisees. Franchisees, at least the great ones, take a
different approach to business ownership. They want to
buy into a proven "system" and assume a little less risk.
Smart folks. But just as franchisors need franchisees and
vice versa, the role of the franchisor is to recognize there
is a difference and do everything possible to not leave
success to chance. They are not in the cloning business,
they are in the business of training, support, and system's
use.
The problem is that most franchisors, especially new ones,
do not possess the innate, or learned, knowledge that
someone buying their system may not have the same skill
sets as themselves. So many times franchisors, perplexed
over a franchisee's inability to succeed, have said to me,
"What's wrong with these people? My program works, and
if they just followed the system, they could make it."
That's when I ask them to explain the system. Awarding
someone a certificate in bookkeeping procedure, sandwich
creation, or proper paper folding technique does not lead to
successful business ownership, it only certifies an
understanding of the technical operation. Unless every
aspect of the proposed business is covered by "the system",
it is not a usable franchise, it's a technical course, and an
expensive one at that.
OK, I won't drag this out. The hideous disease that ruins
so many franchisors (with the exception of deceit) is not
thoroughly testing the vehicle before registering it for use
on the road. If others can't drive a concept accident free,
keep it in R&D.
If you want to franchise your successful business, you must
break it down element by element in order to rebuild it in
the shape of a potentially successful franchise. This is
arduous, pain-staking work that demands the best legal,
organizational, and franchising minds you can bring to the
table. Do not be fooled by "do it yourselfers", do not be
fooled by "fools in the form of franchise consultants" who
promise success without a deep study of your business.
Be confident, but be careful. To the careful and the caring
belong the big franchise prizes.
###
Nicholas Bibby, MBA and MA, Counseling, is principle of
the Bibby Group, an international franchise consulting firm
focused on helping experienced, successful business
owners franchise their concepts through tailored,
professional systems. For more information visit
http://www.BibbyGroup.com, or call Nick at 318/869-1800.
Copyright (c) 2003, all rights reserved
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