Start a business that will satisfy your personal goals in life.
What encourages you to start a business in the first place? Probably it is because you want to be self-employed or have more than just a 9-to-5 job in your life. When you are setting up your franchise prototype, ensure that your business activities will satisfy your needs.
To build a successful business, it is important to know your primary goals, what you want to achieve and what you want people to think of you in the end.
Without knowing what you want to achieve, you will not know what type of business you want to build.
Ask yourself questions such as. "What do I want to accomplish?", Where do I want to live in the next 2-4 years?" How much money do I want?" "Where in the world do I want to travel?" These questions will help set up your primary goals.
Once you know your primary goals, the next step is to formulate your strategic objectives. Strategic Objectives are the list of the targets your business will need to fulfill your primary goals.
This objective could also be tools for measuring progress, executing plans and franchising your business. All these standards should be able to be understood by everyone.
It must also include financial forecasts, such as money you expect to make in gross revenue and profits.
You should be able to define if your business is an opportunity worth pursuing. You need to know if the market is big enough to satisfy your financial and primary goals
And you should be able to define your business type, along with a clear description of your ideal customer group.
For instance, the barber's primary goal is to earn $500 000 a year and at least travel one month every year. That means his strategic objective should outline how his two salons will each produce him $167 000 a year, and also include ways to manage his salons when he goes on vacation for a month each year.
Create an organizational chart for your business.
Many people hate drafting organizational charts for their businesses. Little do they know that without a clear outline of jobs responsibilities, the business might not succeed?
As a business owner, you need an organizational strategy which explains every employee's responsibility in the company.
Even for a one-person business, there is still need to plan your organizational strategy to show you how your business will grow.
You can start by estimating how many employees your business will need and what task each will do.
When you have all positions listed, then create a contract for each position which explains who the employee will report to, responsibility, and which standard methods will be used to evaluate the employee works.
For instance, the barber knows that in each salon he will need at least two barbers, a cleaner, cashier and a general manager that will oversee everyone.
In the beginning, the barber will fulfill all those tasks. He will cut the customers hairs, clean, collect all the money, and manage the daily business activities. But as time goes by and the business is growing, he will know how many employees and what positions he needs to hire for the business to run smoothly.
Since the barber has done all these tasks already before when he is alone, he will know the best approaches for each position. He should document each position duties into a job description manual that he can pass on to each person filling those positions in the future.
A clear organizational strategy further establishes accountability.
Every employee will be responsible for their duties as stipulated in the job description manual and contract.
It should also be compulsory for each employee to sign his/her position contract which shows that they accept responsibilities as outlined in the job description.
At the end, when every position if filled with employees committed to fulfilling all duties in their job description, then your business is on the right path to satisfy the strategic objective and your primary goals.
Manage your employees with a great people management system.
What is the secret to a successful management strategy? Is it finding the most talented individuals in the market? If you focused on getting the best possible talent then you are wrong!
The secret for the best management strategy is incorporating a management system in your business that people react to it as a marketing tool.
So, why a marketing tool? Because the way you treat your employees and push them to do satisfactory work has a significant impact on the product your customer receives.
For example, the barber could manage his assistant barber to practice and learn new styles every week. Or could use him on a video promotion on YouTube. The latter option will result in the assistant to be more enthusiastic about his job and customers will enjoy better services.
The most important part of your management system is to create a people-oriented strategy. And ensure everyone understands the goal behind the work they are doing.
When employees know the value of the work they are doing, they will be more likely be motivated to work toward the business goals.
Lastly, always tests your employees against the standards you have set for each position.
For instance, one of the salon business objectives is to prioritize creativity. When the barber hires an assistant, he will make sure to connect the objective of creativity with his work. He will encourage the assistant barber to utilize his creativity to the max and have a unique style for each customer each week.
This result in the assistant barber to reach his full potential and customer having a variety of styles to choose.
Put your customer on the top of your priority.
Is marketing necessary? How best can you approach your marketing strategy?
All you need is to focus all your energy on the customers and forget about everything else for a while.
Firstly, think about your target group. How old are they? Where are they located?
Afterwards, think about what influence your customer purchasing habits. These will be your psychographics. Why should your target group buy from you and not the competitor?
In the salon example, if the owner does not have a huge budget to spend on customer research report, he could offer free beard trimming in exchange for customers to fill out a quick survey. To understand his customers, he could ask things such as age, address and leisure-time activities his customer enjoys.
He can use this information to improve his services by creating leisure-time activities enjoyed by all while they wait for their turns in the salon.
Once you have all the information regarding your target market, create a marketing strategy which is eye-catching to them.
For instance, IBM Research found a shade of blue reflected dependability to its customers. It used this idea to package their products or highlighted in what is known as "IBM Blue."
For your franchise prototype to be considered by the potential franchisee, you need to consistently market your product supported by scientific statistic data that you have compiled.
That means once your research results show your target market has changed from adults to college boys and your marketing approaches of newspapers are no longer effective, you must change it. For example, consider placing your ads in the college newsletters, to reach them.
Have an operational business system.
What will your business look like once you complete the entire franchise prototype? Will it be complex and easy to run, will the series of all the system be interdependent to the process that makes up the business, from marketing to management to the organizational structure up to your primary goal?
This is possible if you will have a systems strategy where everything interacts with each other, and with this system of interaction, everything will develop and change. A systematic strategy is divided into few categories:
Firstly, hard systems, the physical object that makes up your business such as computers and building.
Secondly, soft systems, the broader idea and living things in your business, such as the owner.
Lastly, information systems, the monitoring systems that gather all the data on your business and use to interpret what is working and what is not working and where there's room for improvement.
For instance, the barber salon, hard systems will include the cutting machine; soft systems will include employees' attitudes; information systems will include bookkeeping records.
All these systems have to work interdependently together to succeed.
It is not possible to act in any one part of the business without taking into account the other parts.
In the salon example, the owner might want to replace the old clipper machines with new clippers, a change to the hard system. For this, he needs to consider how the other two systems will be affected. The soft system could be compromised if the assistant barber only knows how to use the older model, and is reluctant to learn the new clippers manual. The information system will have to monitor if the new machines are cost effective regarding power saving.
When the system cannot run smoothly together, then the business does not have a chance.
Planning and implementing are continuous processes.
To ensure your business is successful, never stop working. As a business owner, you have to constantly be working on your business prototype, changing its systems and ensuring its running at its best form. This process of constantly evolving, monitoring and testing are called the business development process.
Innovation is the first step in the business development process.
Innovation is the process of doing new things. In business, they key to succeed is through innovation. You need to regularly work on inventing new ways and improve your current business prototype.
So, what's the best way to do this?
From Ray Krocs idea, we observed that he did not innovate hamburgers, but he innovated the way they were made and sold.
Quantification is the second step in the business development process.
This is a process of measuring every single process in the business.
You need to measure your innovation impact to know what is working and what's not.
For instance, the barber salon owner will need to evaluate how many hairstyles pattern his assistants has learned during a particular period.
Lastly, the orchestration is the last step of the business development process.
The orchestration is the process of putting your innovations into practice. It involves laying out how your business idea should work and letting it play its course among employees and customers, then observing what happens.
Everything is a continuous process, based on your commitment to innovation and quantification.
This means if wearing a black suit helps you close more deals, then keep wearing the black suit! But if quantification shows that there is a need to change your wardrobe to something more appealing, then revamp your dressing code.
The important point to note is that the three business development process isn't necessarily chronological. They do not happen one after another, but rather all together at once.
Business development is a never ending process, as we are constantly in search for innovations, orchestrating them into our business models and measuring their results. This process will lead your small business to success