How can you take an un-seemingly un-scalable time-related business and make it scale into the millions?
Franchising.
The easiest way for people in skilled service jobs to start their own business is to start a service business.
Electricians end up starting their electrical firm.
Hair stylists and beauticians end up opening their salons.
Mechanics start their shop or traveling mechanics business.
But, these businesses are limited to the time you put in or the people they hire to work for them.
Then these businesses propose another problem employees and brick and mortar locations.
But, what if a skilled laborer wanted to start their own business and didn’t want employees or the headaches of a brick-and-mortar location?
Franchise; Scale an un-scalable business through franchising.
The problem with service businesses is there are only a certain number of hours someone can put into providing the service.
To grow the business, you either need to work more hours or charge more for your services. What if you want to go on vacation? The service business doesn’t bring in any revenue while you are away.
Many service businesses don’t at all sound like a multimillion-dollar-a-year business until you consider the possibility of franchising.
Franchising allows someone with a ton of service-based knowledge to leverage their skills into a possible multimillion-dollar business.
Franchise; Create a replicable system for your franchisees to follow.
The saleable aspect of a franchise is not just brand recognition, but the systems and the plan. The system and method you create are where you’ll make money.
And, this is where your customers will find value in your franchise. Most people buying a franchise do so because starting their own business from scratch seems daunting.
Many have never been in business before and might not even be entrepreneurial.
The systems and having a plan for everything to lead them step by step through the business will be gold.
So, if you are thinking of turning your service-based business into a franchise, everything will need to be documented and have a process laid out.
Your franchise customers need to have the reassurance that your system will take them by the hand and lead them through every aspect of the startup process to the end goal of turning a profit.
I’ve seen a bunch of TV shows dissecting different businesses and the biggest problem with franchises is the lack of processes and standards for the franchise stores.
Franchise; Build your franchising brand.
Your new franchisees will also be buying the brand. The more powerful the brand, the more the franchise is worth. Brand recognition is what will jump-start the customer base when your franchisees are brand new.
If they were starting a new business right from scratch, it would take them a while for their branding efforts to kick in.
The more pronounced the brand, the easier the startup customer acquisition will be.
Franchise; Solicit franchisees close to your niche.
Trying to find new franchisees can be pretty tough if you are still trying to build your brand identity.
What I recommend in this case is to look closely at the related businesses where you could sell your franchise to open up another avenue of revenue within that business.
In Elaine Pofeldt’s book “The Million Dollar One Person Business,” she uses an example of someone who has a high-end eyebrow styling company catering to the ultra-rich and celebrities.
They began partnering with salons and boutiques to add the eyebrow styling service to their long list of customer offerings. In this case, the eyebrow business received a percentage of revenue share.
The same would also work in a franchising opportunity. You could sell a franchise to other related businesses.
If you had a pet grooming franchise, you could sell it to pet stores or veterinary clinics.
What about selling a massage franchise to nail salons or hair salons to help them increase their offerings to an existent customer base?
If you were a baker, you could sell a baked goods franchise to regular deli’s. You would supply all the recipes, branding, packaging, and marketing to deli’s who would not usually do any baking. The deli would then be able to offer fresh baked goods as well as their meats, cheeses, and salads.
These small add-on franchise opportunities would be a way to begin selling when you are just trying to get off the ground.
Franchise; Pull back and run the franchise.
Now the power of a franchise is when you have enough revenue coming in every month, and you can pull back and just run the franchise end of it. You won’t have to be the technician in there doing the work.
Your job will turn into running the franchise system. And, the better the system you build, the better things will roll automatically.
This is why it’s better to create all the systems in the beginning so you won’t have to go back and fix them later.
At this point, the money will keep growing and your time spent in the business will steadily decrease.
If you wanted at some point to walk away, you could hire a manager to take your place. With enough systems in place, everything should continue to flow even while you are on vacation.
In a service business where the revenue seems stifled by not being able to increase pricing and the hours spent are limited, franchising is the one way to scale it up to almost any level possible.
Till next time, be safe.
Kevin