multiplying a single success

1

How to multiply your

small business

Single Owner to Business Executive

Source: The E-Myth Revisited:

Why Most Small Businesses Don't Work and What to Do About It,

Michael E. Gerber, HarperCollins Publishing

Ron McFarland Tokyo, Japan

2

In start-up businesses, there

are three roles the owner plays.

The Technician

The Entrepreneur

The Manager


3

The Entrepreneur

The Entrepreneur

1. He lives for the future.

2. He is an innovator.

3. He is a grand strategist.

4. He is the creator of new markets.

5. He is the builder of businesses.


4

The Manager

The Manager

1. He lives for the past and uses what is known.

2. He wants control and order.

3. He comes along and cleans up messes

caused by dreaming entrepreneurs.

4. He keeps the business going and achieves

goals through current processes.


1. He is the doer. He does things himself to insure they are

done right.

2. He lives in the present and addresses current issues daily.

3. He thinks if he is not doing something right now he is not

working.

4. He is highly individualist and works best on his own.

5

The Technician

The Technician


6

A huge 70% are

technicians that are

good at doing something

and marketing it. He

wants to be his own boss

and take control of what

he does.

Only 20% are

managers.

Only 10% are

entrepreneurs

actually.

At the point of start-up…….

The role when starting a business


7

At some point, he can not keep up with the

work and the business suffers or fails.

First few years of operation

Over the first few years, the owner does all the

technical work until he becomes overloaded.


8

Staff has to be added.

People like people who are similar to them.

But hired technicians become employees and are not owners.

They do not have the desire and business ownership passion.

If the “technician type” owner looks like this,

he will more than likely hire someone similar.


1. Lack of attention.

2. Trust in the way they work and perform can only go so far.

3. Accountability is only on the owner.

4. The owner can not just give assignments and forget about

them.

5. He must put in procedures in written form, have them

explained, practiced and monitored.9

Adding staff

These people think differently. They don’t care about

the long-term success of the business. Therefore,

performance is different.


10

The Entrepreneurial

Perspective

He knows how to build a

business that gets things

done.

He knows how to develop

business practices.

He knows how to standardized

business practices.

The Entrepreneur’s & Technician's Perspectives

The Technician’s Perspective

He knows how to do things.


11

Business Model Questions for the Entrepreneur’s

What is important to him is how things

are done, not just what is done daily.Ron McFarland Tokyo, Japan

12

From the answers to these questions a

Business Format Franchise is created.

Forming a standardized business model


13

The Business Format Franchise will determine how the

business operates and what is expected in each position.

Business Format Franchise

This type of franchising is not just brand name but practices.


14

Why a franchised format vs. an independent format?

First year –

50% success rate

First 5 years –

20% success rate

First year –

95% success rate

First 5 years –

75% success rate

The system, to every detail, manages the

business and makes the decisions. The staff

just perform the functions as assigned.

Independent


1. Start with creating a single prototype of the organization including

an operations manual and checklist for each job in the organization.

2. Run the operations for a give period of time and make adjustments

and additions as need be.

3. Once there is confidence that these are the ideal procedures start

to duplicate it in an another region.

4. Once the pilot duplication is successful, move to other regions

15

Confirmed Prototype

Procedures for setting up a franchise operation

First Prototype


16

Procedures for franchising

Explore minor modifications in the franchise model

on quarterly and yearly basis. These should be so

minor that they do not drastically impact the overall

character and values of the organizations (small

additions to assignment check sheets, etc.)


17

Franchise business model rules


18

Tasks to achieve target

What you standardize must be

quantifiable and measurable.


19

Company procedure example #1 (hotel)

Procedures should be set so the person doing it

does not have to think, he just does it.

All front desk clerks must start with this question when a customer

checks in.

Hello. Have you

been to our hotel

before?

Great. We have a special

for people who have never

been here before.

Great. We have a special

for people who have been

here before.

No

Yes


20

Points Meeting and Greeting Activities

/ 3 Did the salesman get the customer's name and start using it? (3 points extremely well, 0 points not at all)

/ 5 Did the salesman closely observe the customer? (5 points extremely well, 0 points not at all)

/ 3 Did the salesman match the customers voice level? (3 points extremely well, 0 points not at all)

/ 3 Did the salesman match the customers posture? (3 points extremely well, 0 points not at all)

/ 1 Did the salesman match the customers facial expressions? (1 point extremely well, 0 points not at all)

/ 5 Did the salesman match the customer's language ability? (5 points extremely well, 0 points not at all)

/ 5 Did the salesman smile? (5 points extremely well, 0 points not at all)

/ 3 Was the salesman's dress appropriate for the situation? (3 points extremely well, 0 points not at all)

/ 5 Did the salesman have good eye contact? (5 points extremely well, 0 points not at all)

/ 3 Did the salesman ask permission to ask a few questions? (3 points extremely well, 0 points not at all)

/ 36 Meeting and Greeting Total Points

Another example #2: How salesmen are to sells to

regional hardware distributors


21

Points Qualifying and Counseling Activities

/ 5 Did the salesman use open-ended questions? (5 points extremely well, 0 points not at all)

/ 5 Did the salesman get the customer talking 80% of the time or more? (5 points extremely well, 0 points not at all)

/ 5 Did the salesman determine the customer's dominant buying motive? (5 points extremely well, 0 points not at all)

/ 5 Did the salesman determine what product to present? (5 points extremely well, 0 points not at all)

/ 5 Did the salesman determine what features on the product to present? (5 points extremely well, 0 points not at all)

/ 25 Qualifying and Counseling Total Points




22

Points Presentation & Demonstration Activities

/ 5 Did the salesman present a pamphlet of the product to the customer? (5 points extremely well, 0 points not at all)

/ 5 Did the salesman explain labels outside and inside the package (5 points extremely well, 0 points not at all)

/ 5 Did the salesman play the video and explain the features? (5 points extremely well, 0 points not at all)

/ 5 Did the salesman explain the applications? (5 points extremely well, 0 points not at all)

/ 5 Did the salesman explain displays, assortments or promotional material? (5 points extremely well, 0 points not at all)

/ 10 Did the salesman demonstrate the performance in front of the customer? (10 points extremely well, 0 points not at all)

/ 10 Did the salesman let the customer use the product? (10 points extremely well, 0 points not at all)

/ 5 Did the salesman ask a trial close question? (5 points extremely well, 0 points not at all)

/ 50 Presentation & Demonstration Total Points




23

By using this format the salesmen knows how to

best serve the customer and the company.

Points Closing the Sale Activities

/ 10 Did the salesman present an order form and ask a closing question? (10 points extremely well, 0 points not at all)

/ 5 Did the salesman determine specifically if there were any objections? (5 points extremely well, 0 points not at all)

/ 5 Did the salesman ask the customer if he would buy if his objections were answered? (5 points extremely well, 0 points not at all)

/ 5 Did the salesman start high in his negotiating, at the distributor net price? (5 points extremely well, 0 points not at all)

/ 5 Did the salesman come down slowly in his discounting? (5 points extremely well, 0 points not at all)

/ 5 Did the salesman give reasons for reducing the price? (5 points extremely well, 0 points not at all)

/ 10 Did the salesman wait for the customer to raise his price? (5 points extremely well, 0 points not at all)

/ 10 Did the salesman continue to sell value? (5 points extremely well, 0 points not at all)

/ 5 Did the salesman make the negotiating fun and interesting? (5 points extremely well, 0 points not at all)

/ 10 Did the salesman get a signed counter offer? (10 points extremely well, 0 points not at all)

/ 70 Closing the Sale Total Points




24

People Strategy

How do we get our people to follow the operations manual?

Look for people who are willing to follow

procedures.

During the interview,

present and explain the operations manual in the most

detailed way possible.

During the interview, introduce

the person who will be supervising

the activities.

Present and give an

agreement to the candidate and confirm

his willingness to

follow the procedures included.

Have the new

candidate sign the

agreement at point of

employment.


25

Franchise Certification

After all the people in a new franchise have been trained

and are skilled to perform the tasks, a certificate of

completion is presented, and the franchise has the right

to operate.


26

Thank you

Franchise development

-the road to multiplying a small

business success-
