Being In Business For Yourself - But Not By Yourself
‘Franchising is not for everyone’ states Colin Mackie, CEO of Enterprise 21. ‘It’s the safest way to go into business without dispute. It is a fantastic medium to get started and, if you stick with the system, profits can be very lucrative.'
The adage that states ‘Franchising is being in business for yourself but not by yourself’ has new meaning if you have read Gerber’s excellent book; ‘The E Myth Revisited’.
The ‘E’ stands for Entrepreneur and the myth is that to be successful in business you need to be an Entrepreneur. “No, no” says Gerber. A successful business needs three different skill sets to reach and maintain success. Entrepreneurialism is the touch paper to start the process, but generally Entrepreneurs are shocking managers or administrators. Entrepreneurs generally, but not always, come from sales and marketing backgrounds. They are ideas people. They have a knack for spotting opportunities.
But they can often be the ‘manager from hell’. They lack the discipline required for the day-to-day operation of a business. They often, too, suffer from more than a modicum of conceit. A dangerous trait for maintaining an Enterprise.
These Entrepreneurial types generally have not got the attitude or fortitude to continue to work at the coal face.
They are, however, the people who are absolutely essential in getting any business or franchise off the ground. And if they know their failings and limitations, they hire others with the skills they lack. Many franchise systems you will find have two or three owners / directors who have complimentary skills.
Enter Franchising.
The Franchisor with their team of professionals, develop the system, systemise the whole operation to maximise effort and profits and minimise costs. They maintain this role of macro managers to constantly monitor the market and modify, improve and alter the systems on a continual basis.
Almost every Franchise system derives its income either directly or indirectly through the efforts of the Franchisee. Therefore it is essential that the Franchisees are happy and productive.
The Franchisees role is the coal face. They are the technicians and the micro managers. They make sure that the image presented to the public is the best it can be. They manage staff and stock according to the systems. They undertake point of sale, advertising, and marketing according to the manuals.
A good Franchise system should be a true win-win-win-win-win situation:
- The Franchisor wins by helping an excellent team of Franchisees.
- The Franchisee wins because the major, external fads and trends are managed by the Franchisor.
- The families of Franchisees win because a Franchisee usually suffers much less stress than an independent business owner.
- Customers win (generally) as they get the best product or good value with the best service and continuity.
- The last ‘win’ is direct and indirect staff - people who are treated correctly. Also, shopping centre leasing agents or landlords have more reliable tenants.
There will always be exceptions to the rule and anecdotes that may argue the contrary, but evidence is greatly in support of Franchising as the safest and most lucrative method of small business ownership.