Turn the key for a powerful business

Michael Gerber “The E Myth” calls it the turn key revolution. This revolution began in the 50’s with the McDonald brother’s making hamburgers. Ray Kroc saw how the brothers had a system of making burgers that was so efficient and fast, people lined up in droves. Now there are almost 30,000 Mickey D’s around the world.

So why has this turn key model grown so fast as a way of doing business? Simple: It Works! And it works for many different types of owners all with different business personalities. There are more than 3,000 different business models that are turn key. Fast food and restaurants are the categories you think of first; but, most are actually service businesses and most of those are run out of the home with small staffs. I am, for example, a franchise coach. A franchise called, The Entrepreneur Source, and we help folks find the right franchise. A franchise to find franchises. What a country! Find a need then fill it with a business system that can be duplicated and is scalable.

Why it works: it is the system! Virtually every franchise has a cookbook or training manual for the owner. Ray Kroc took the system created by the McDonald brothers and ultimately took it to the doctoral level, Hamburger University. Every employee or team member knows clearly what to do virtually every moment the business is open. Think of the works of a clock. Wind it up or add the battery and all the gears and wheels work in tandem to move the hands accurately. You can depend on the accuracy of this little system, as you can depend on the system in a turn key business. The watch keeps time the franchise makes money. So powerful is this formula, that many take a portion out of their life saving in the stock market or retirement to achieve a greater return on investment and an investment they have more control over.

So how risky is a franchise investment? Almost 8 out of 10 franchise businesses will survive 5 years verses 4 out of 5 failures in 2 years for non-franchise start-ups. But beware, the success is in you! I have owned several businesses and can assure you that the heart and effort of the owner controls the success or failure of the business. Even a great system will not overcome lack of effort, fear, or other personal issues. Fortunately, most viable franchisors will uncover these warning signs and refuse to award their valuable systems when the warnings signs are there. This is another benefit of franchising. If you get a hard sell on a franchise beware. The legitimate sell will be both sides asking penetrating questions. This is truly an eye opening, valuable, and fun process. Most franchises challenge you not only to read a daunting document (FDD) and talk to several existing franchises; but, they may ask you to complete a business plan and cash flow projections. When the prospect writes the check, he should be very comfortable and then he goes to training for the frosting on the cake.

You are never alone! Even with great preparation and a great system, every business start-up is different. Markets, the economy, demand for the service all make for questions and the search for solutions. Perhaps the least understood power of a franchise is the emotional support for the owner. Starting any new business is hard work and it takes 50-60 hour weeks in the beginning. During those tough times, you need more than your mate saying “honey you can do this”. You need someone who has been right where you are to say “here is the solution and if you continue working hard this is the prize. If I could do it you can too”. Typically, through training, important friendships are made that continue for years. This emotional support is a very important part of the system for success.

So what can go wrong? Stuff happens in business as in life; but, the single most important axiom in the turn key system is?? Don’t turn the key if you don’t want to follow the system. In business there are certain personalities that know they are smarter than the system and they will deviate soon into the start-up. They never understand their own belief system is undermining and torpedoing their success. I am sure a huge percentage, I will say even most failures, are hard headed owners that blame the system or their market rather than simply embracing the system. Note: If the government wanted to fund an important study, a test to uncover this gene would save many broken homes and lives.

So do you have what it takes? Engineering types, number crunchers, nurses, teachers, all make good franchise owners because they are system oriented. On the other hand, the inventor, the dreamer, the artist, tends to get bored quickly with the system (not good). There is help! A franchise coach usually is compensated by the franchisor companies so the coaching is low cost or even free. Guys like me, come along side and help the investor evaluate the myriad of choices and models (or you can jump on the internet and drive yourself crazy). The coach will get to know you and only show you ideas that fit your profile. We are the starting point in the system. Did I mention the benefit of the system?