Making the jump from two units to five or 10
Growth, it's everyone's goal: the premise for my first article regarding growing from one unit to two. Now that you are a multi-unit franchisee, you must either commit to staying where you are or make a substantial commitment to further grow your business.
I say commitment because that is certainly what it is. Once you step out and grow past two units, things begin to change that require a substantial commitment. Once you open your third store you have to begin the process of forming an organization that supports your individual store operations. Human resource issues such as hiring, firing, benefits, training and growing people become a serious time commitment for which you will need help.
Accounting is no longer an after-hours effort on your part. Payables and payroll begin to take more time than you or your spouse may have. Marketing begins to take more time as you put together store-level marketing plans and manage media buys that will benefit all of your units.
You quickly find yourself stretched too thin to continue to run your business on your own. You begin to lose a connection to your operations teams because you are devoting more and more time to back-of-the-house operations. Your leadership, the importance of which I discussed in detail in my last article, begins to suffer.
Commitment now means spending the dollars to start putting an above-store team together to help you manage the growing activities that do not relate to daily in-store operations.
The challenge you will face is needing this help before you can afford to pay for it. So when you gain the need at three stores, you find that you need five stores to pay for it. And once you get to five stores, you need a larger organization of 10 units to spread this growing overhead.
Your leadership role must further evolve as well. You will find that you are evolving from an operator to a developer as you focus your efforts on building stores and ensuring successful openings. You also now have a hundred or more people working in your organization. Company culture must become a focus. Instilling your vision for how your organization treats employees, as well as customers, is more important than ever. Course corrections become more difficult as the organization continues to grow.
The key principles I wrote earlier -- accountability, developing people, and delegation - become even more important as you are pulled further away from frontline operations. You must focus harder on teaching these principles to your management team.
At some point in the process, you will make the decision to hire an operational expert to take over the direct management of business operations. Hiring this first multi-unit manager will be one of the most important hires you will ever make. He or she must share in your particular vision and believe in the same principles you use to run your company. A shared vision of developing people is crucial. If you misstep here, your business will suffer and your profitability will plunge. Learn to interview well, take your time in the process, check all referrals, and do your due diligence.
Behavioral interviewing, one of the most useful skills I have ever learned in the field of making better hires, I learned while I was the vice president of development at Dominos Pizza. Many great resources exist online, and there are several books written on the subject. When I apply these principles to a job interview, I gain more insight into the candidate than with any other method. Behavioral interview questions are difficult to answer, but the speed at which the interviewee develops an answer can give you as much insight into the person as the answer itself.
Over the years, both with J.D. Byrider and other companies, I have watched many franchisees grow from one store into large organizations. I have witnessed mistakes and shortcomings of owners that have limited their growth, and I have seen owners evolve their capabilities, overcome limitations and develop into great leaders. I offer a couple of insights into what I have learned from those that have developed themselves and overcome shortcomings to succeed.
Keep Perspective - Maintain your focus on what you and your organization are becoming, not what you are doing. Get past the checklists and see the bigger picture. The first question I ask any franchisee when I meet them is, "What does your business and personal life look like 10 years from now?" Ninety percent of them do not have an answer. They are so caught up in the day-to-day activities that they do not have a plan. Consider where you want to be 10 years from now, and you will manage your team quite differently knowing that you cannot get there without them.
Develop Yourself - Learning is a lifelong journey. Be humble enough to step forward and learn from others. The moment you think you have it all figured out is the moment you begin to fail. Find examples in others who have passed the trials you are facing and learn everything you can about them. Seek mentors from your peer group or advisors. Often your attorney, accountant, or other advisor has witnessed and helped someone just like you through difficult times and can have great teachings and insights.
Don't Stress - Trials and difficulties offer us an opportunity to grow and become better. I can guarantee you will have your fair share. Take them as they come and learn from them. Some will cost you money. Some will cost you even more. Do everything you can to learn from others' mistakes - your franchisor is a great resource for these learnings.
As stressed before, ultimately, there are great rewards for those of you who develop yourselves and your organizations into successful multi-unit franchisee companies--rewards that go far beyond profit.
Enjoy the Journey!
Michael Pearce is the vice president of franchise development for J.D. Byrider, the nation's largest used car and finance company franchise. Anyone interested in learning more about franchise opportunities with J.D. Byrider can contact Pearce at 800.947.4532.