I heard the phrase ‘expert’ defined this week as ‘someone who’s made a lot of mistakes in a very specific area’. After having a courier company for the last 23 years I have learnt the hard way the best ways to do and, more importantly, not to do business in the world of logistics. I’m an ‘expert’ no less. And it is all that experience which has crafted our franchise model. The franchises that simply follow the Diamond prescribed way of doing things succeed. Simple as that.
To be frank I wish someone had offered me this template when I started out 23 years ago – the cost of all the mistakes I have made is, well, I shudder to think, and the beauty of our particular model is that it has removed much of the laborious but necessary admin stuff which suffocated us administratively which took us away from what, should have been, the core function of getting and keeping clients. Which is your number one priority in building a successful business.
It’s why I totally rate the franchise model for startups. The best of both worlds. Your own independent business yet backed by the expert guidance of a proven business model short-cutting your way to success. The franchisor has historically made and learnt from their mistakes so you don’t have to.
Unless, that is, you make the fatal new franchise errors which I have seen again and again.
I have a group of fellow franchisors who I regularly meet with and we all, without exception, experience the same mistakes being made by a small percentage of franchises that will go on to inevitably fail.
So here it is – my comprehensive guide on how to avoid failure and build a successful Franchise.
- Ensure you have plenty of volume in the top of your sale pipeline – the conversion ratio of leads to actual purchases is very important. Understand your sales funnel, rate of conversions and how many enquiries you need to have to get a sale. Lack of lead volume won’t kill you today – but it will kill you eventually. You need to prioritise this daily.
- Make sure you close your sales – Ask for the business – poor franchises may even generate the leads – or indeed have them generated for them, but then fail to close the deal. Conversion to paying customers is essential.
- If you are not a sales person, get one. But don’t abdicate the sales effort. Don’t believe your sales person will do it – check that they do. Figures speak the truth. Look at the Activity/Pipeline/New Accounts and daily, weekly and monthly revenue figures.
- Stick to the plan. Despite buying a prescribed formula some just try and run the franchise differently to how their handbook dictates. If it’s a great franchise suspend your initiative/experience/whatever and work the plan you have been prescribed.
- Persist. Some newbie franchises give up quick –some in under six weeks I have heard! Sales are like pumping water from a well – you have to keep on pumping or you never get sufficient momentum to sustain.
- Stop sweating the small stuff. Franchises aren’t perfect – it’s impossible with a human element. If you get caught up in the minutiae of nitpicking every little thing, you will be wasting valuable energy and time on detail when you could be building sales revenue.
- Take responsibility. As any good entrepreneur will humbly acknowledge we live and die by our own efforts. If it ain’t working – and it’s working for the majority of your franchise associates – then it is YOU. Be honest, look at your own commitment, skillset and ability. Work on this to improve performance.
Buying a franchise of a long standing and respected brand improves exponentially your success probability, and saves you making expensive mistakes. And I guess the words of my best start up franchise in 2014, when asked for the insight into his success, sums it up entirely. ‘I just did what you said in the manual and the training. It works’.
Simple as that.