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Why Build a Franchise Prototype?

2006 | Oct 12 in Systems , Management

By Michael Gerber,

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At E-Myth Worldwide, we coach and encourage our business owner clients to get free of their business by becoming self-sufficient, lead-generating, client-converting, customer-satisfying machines. How? By designing systems to get work done, and training people to operate those systems to produce consistent results.

If this sounds similar to a franchise prototype, you're right. And while that's usually the domain of fast food restaurants, hair salons, gyms, and other industries whose familiar signs dot the commercial landscape, the advantages of the franchise prototype apply to individual businesses as well.

Get free from your business

The goal for many small business owners is to be liberated from their business, and I suggest that the best way to make this goal a reality is to build a franchise prototype. Now, actual franchising may not be part of your vision, but if you're to achieve the ultimate reward - freedom from your business to enjoy more life - you have to behave as if it were.

For a franchise prototype to be successful, it needs flawless systems for marketing, finance, management, operations, and leadership so that anyone can step in and not only understand them, but run them. This will ensure that the business can function efficiently without your daily involvement or, ultimately, your actual presence.

Create a true franchise prototype

Most small businesses are dependent on the expertise of whoever is on payroll at a given time. As a consequence, how tasks are performed changes as people come and go. The danger is that customers will have unpredictable experiences with your business, and might not come back.

Your franchise prototype should clearly document "the way we do it here," and the resulting proprietary operating systems will ensure that tasks are always performed consistently, regardless of who carries them out. This manifestation of your best practices will create predictable experiences that your customers can rely on - and which in turn will help you grow and develop a true turn-key business that'll be attractive to investors.

A franchise prototype in action

One of our clients, Ron, offers insurance and financial instruments under the aegis of a national franchise. When his product range and possible markets expanded, he opened a second office. This doubled his exposure, but halved the time he could spend in either location. Because his name was on the doors, people who called either location expected to speak with him personally, which was clearly not possible.

Ron examined his business objectively, and worked with staff to create systems for their initial and routine client engagements. He hired new agents to take his place on the phones, crafted procedures that reflected his ideal for client care, and built up his staff's expertise.

This strategy proved so successful that Ron opened his third office, and now personally handles only the most demanding investment accounts. Instead, he spends the majority of his time focused on what he calls "management by remote control" - watching his equity grow while poring over sailboat brochures, pondering which to purchase when he decides to sell his systematized, turn-key agency.

Why not you?

Begin by asking: What does my business have the potential to do? What markets do we serve? What is unique about us? How do we create - and maintain - great customer experiences?

I once overheard an E-Myth coach say to her client, "If it's in your head, it's an idea. If it's written down, it's an asset." When your vision has been converted to a clearly documented network of systems, you will have created your own franchise prototype - or what you might proudly call: "The way we do it here."

Check List

  • A "franchise prototype" is your proprietary way of doing business
  • Observe your business as if you intended to franchise it
  • Have a clear picture of what you uniquely offer to your target market
  • Create documented systems that'll ensure consistent customer experiences

Building Your Prototype Virtual Seminar

You understand the fundamental importance of systems, but how do you start creating systems without documenting every little thing that is done in your business?

Attend the Building Your Prototype Virtual Seminar and we'll help you develop a sensible Systems Strategy Plan in order to turnkey your business.

Learn more

Comments

  1. .Carrie B. says:

    This is the mindset that sets successful businesses apart from those who invest tons of time and money into sweat equity and at the end it still depends on them. If they were to sell the business it would only be worth the hard assets they could sell off. What a shame that would be to end up with no-added value to your business when all is said and done. Brilliant article! I love it! Carrie Beal

    Submitted Oct 18, 2006 1:27 PM

  2. .Hasan L. says:

    The Franchise Prototype is not about McDonalds! One of the most common things were hear at E-Myth is, "My businesses is not like McDonalds we do complicated stuff, so it does not apply." We respond by pointing to the Franchise Prototype, which is not really about turning your business into a franchise, you can if you want, but that is not the real value. What is amazing about this model is how it changes the way people look at their business and the work they do. Instead of looking at a project and asking yourself and your team, "how are we going to flawlessly execute this project for the client?" They ask, "what is our system for achieving this result in a consistent and predictable manner?" The work on the front end is more difficult, not only do you need to satisfy the immediate needs of the client, you are also designing a business process / systems in parallel. The difference is remarkable, the Franchise Prototype approach adds to the value of the business and expands the opportunities it has in the marketplace. When the next big project rolls around you have a process in place the deliver on your promise, and this time you do it a little faster, earning a few extra profit margin points. You are building efficiency, influencing customer satisfaction, and fortifying your business against competitive threats.

    Submitted Oct 20, 2006 9:00 AM

  3. .Jim J. says:

    Over the years, Iíve observed one of the largest keys to failure among small to medium size businesses- ack of market diversity. The FP article is a classic lesson in assuring your business doesn't suffer from a fatal entrepreneurial disease called 'singular market demise'. This metric positions business owners of any kind to establish stability and diversity necessary to endure the ebb and flow of isolated markets, providing the climate to keep the proverbial eggs in multiple baskets.

    Submitted Oct 30, 2006 8:11 AM

  4. .Shaun P. says:

    I really think that this is probably the only way to do "smart" business. I am excited to start my "way of doing it here" systematic reference.

    Submitted Apr 8, 2009 4:25 PM

  5. .Bob T. says:

    I often ask my clients.."if you were to try to sell your business today would you be selling "YOU" or your brand/product/services?"

    In almost every case my client pauses and says "ME" and the lights finally go on that to sell a business is not selling "YOU". My wife and I learned that while owning a successful Bed and Breakfast Inn in Northern California. The buyers bought the inn a turnkey operation,not US. We created a brand, a system, and consistant Four Diamond AAA Awared Services. Thanks to Michael Gerber and The E-Myth Revisited.

    Bob and Karen Tierno

    Submitted Apr 9, 2009 11:13 AM


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