The franchise model is one of the most successful business models in history. One of the reasons for this success is that franchisees are given a blueprint to follow with processes and procedures that create consistency, reliability, and predictability. That is why every business needs systems like a franchise.
Independent small businesses often tend to rely on more ad-hoc approaches. This means the businesses rely on the decisions made by employees as opposed to a set of documented processes and procedures. This can lead to the business owner micro-managing every employee within the business which can stunt the growth of the business and cause stress and burnout for the overwhelmed business owner.
You could take your business systems and create a franchise model for other entrepreneurs to purchase and follow. Even if that’s not your goal, you should build as if it were. Being part of your franchise means new franchisees benefit from all the hard work you’ve invested into your systems.
Once you’ve got one franchise system up and running you may find many of the systems are transferable to other businesses. That’s exactly what Jim Penman from the Jim’s Group has achieved in Australia. He started out in the lawn mowing industry in 1982 and now the group has expanded to many different businesses, the most recent being Jim’s Laundry Services.
The ad-hoc approach to business almost always creates inconsistent results which makes it more difficult for the business to scale. In the book, “The E Myth Revisited Why Most Small Businesses Don’t Work and What to Do About It” Michael Gerber used the idea of building a franchise system prototype. The idea was to think like an entrepreneur and build systems into your business that anyone can follow, just like franchises do. This creates consistency in the business no matter who is following the system.
This same concept can be applied to your business whether you are a franchise or an independent small business owner. By creating processes and procedures, you create a system that will produce results regardless of who is carrying out the task. This takes the load off of the business owner and makes replacing staff easier.
If you purchase a franchise, there is often an extensive training program to learn how to do the work. Franchisees not only receive official “hands-on” training but also can rely on other franchisees for help and support. For independent businesses the same principles should apply.
If you’ve got great systems the goal is to get your staff to understand and follow the system, each and every time. When business owners understand how to create systems which are easy for their staff to follow, businesses can run much more smoothly. Systems and processes make it possible to train and manage people, rather than the other way around.
When you have a clear understanding of what you expect from your staff, they are more likely to meet or exceed your expectations. Poorly trained staff and bad management often create inconsistency in terms of customer service, product quality and more.
By creating business processes and procedures that your team will use every day you make them easier to manage. This means tasks are done in an efficient manner without cutting corners. When you have a standard operating procedure for all tasks it means that you can keep track of everything that’s done within the business. If you know what needs to be done, when it is due and who should complete the task, you can allocate the appropriate staff and manage workflow far more efficiently.
This becomes more important as your business grows and the business owner or management can no longer stay on top of everything. The saying “you can’t track what you don’t measure” is very relevant when it comes to business efficiency. Processes and procedures make it easier to identify mistakes before they happen, saving you time and money.
When you have a process in place, it’s much easier to change one step without causing an upheaval throughout the entire system. You can make small changes gradually and see how they work before making bigger changes. This is not as easily achievable in an independent business where everything is done ad-hoc with no real rhyme or reason.
Great systems give you a controlled environment where you can test, measure and tweak new ideas, creating continuous improvement. Without controlled systems it’s difficult to assess the success of any changes within your business and therefore it’s difficult to know for sure what changes have been beneficial.
Processes and procedures provide you with a system to follow, but they also give your team support. When you know what you should be doing and how you should be doing it, you’re not alone, you have a team backing you up. This is an invaluable resource when things get tough or when you need a sounding board for ideas you may be considering.
Without a well-defined process your staff may feel isolated and alone, you won’t have the support of your team; you’ll need to make changes on an ad-hoc basis which you could get wrong or worse, not implement at all because you don’t always know what’s best. Systems help all team members feel like they are a part of something that is bigger than themselves. They’ll feel like they are involved with something that’s going somewhere.
Your team will sense you are taking them somewhere when they see you are trying to improve the business and growing. This will help your staff feel secure in their employment and may open up career opportunities within the organization. Continuous improvement will show you are committed to the success of your team, you’re a leader and you care.
Why are management procedures important? Because small business owners often have to wear many hats. When you have a business built on systems you can scale. You can make the current business you have grow or you could even replicate it to another location. You already have everything in place that has been proven to produce predictable results so you know you can repeat the process. It’s not just about getting bigger; you want to grow and you now have a system that will allow you to do so without losing control of your business and your life. That is the importance of a franchise system.