Culture of Execution. The Winning Formula

Business is easy, it’s the people, processes and products that make it hard. When it comes to creating a winning formula, it is important for small business owners to know the key ingredients. According to the Bureau of Labor Statistics’ Business Employment Dynamics, about 80% of businesses will survive their first year in business. About 66% will survive their second year. Only about 50% will survive their fifth year. About 30% will make it to their tenth anniversary. As you see, if everyone had the winning formula more than 30% of businesses would still be around 10 years later.

An Easier Path

Because of numbers like these, more and more entrepreneurs are turning to franchising. Franchising offers a template for success. The things that business owners didn’t think about when they were formulating their plan, such as real estate site selection and its impact on the business, architectural design and its impact on operational flow, the development of key business systems and their impact on efficient operations, documentation of critical operational processes to ensure consistency, and the impact of a well thought out marketing plan that helps to create brand presence in a new market, are a handful of the business success factors that make a franchise relationship so valuable.

A strong franchise brand will have already tested and refined all aspects of the business model, saving the entrepreneur the headaches that come with doing it themselves, as well as the heartache associated with the unintended consequences of not knowing what they do not know.

The Issue

Theoretically, all the entrepreneur must do after engaging in a franchise relationship is effectively implement the systems and adhere to the brand's standards. However, that is many times easier said than done. Success in franchising only goes as far as the franchisee’s willingness to adhere to the established systems and operating standards. There is a reason why some franchise owners in similar markets with similar demographics succeed and others fail. If we did an autopsy of failed franchise businesses, I am quite confident that we’d find the cause of death to be rooted related to how well they executed the proven formula.

The Failed Business Autopsy Report

• Time: Typically, at the start of the relationship every new entrepreneur franchisee is all in with the franchisor’s systems and procedures. They begin their new endeavor with enthusiasm and great optimism. They implement their training like they were taught. However, as time passes many begin to loosely apply their learning and become relaxed with implementation of the brand’s operating standards. Then, shortcuts creep in, knowing a better way rears its ugly head and before you know it, the proven methods begin to be replaced by “a better way”. Unfortunately for many, the better way isn’t always better. What lured them to franchising in the first place is replaced by loosely structured systems and poor execution. Inevitably, this leads to lost sales, less than lack luster service, and never reaching full potential.

• Consistency and Accountability: For any business to be successful everyone must be held accountable for results, including the franchisee. Failing to consistently hold everyone accountable to the standards of operation is the first step toward failure. When a franchisee starts to relax on the marketing routine, operational standards, and financial fundamentals, the system begins to take on a new standard. That standard usually involves less than great service, average product, below average cost containment, and a less than stellar brand image. The typical result is a decline in sales, which directly effects revenue.

• Execution: Business is about getting things done and doing them the way they were intended to be done. Failing to get things done as intended leads to stagnation and stagnation leads to status quo. Status quo leads to becoming average at best. No one in today’s world, which is full of many great alternatives, is going to pay for average. Once you become average you become a memory. When there are many options to choose from you must stay top of mind. Those that are top of mind are the highest performers. The highest performers execute.

Commit to the System

Most entrepreneurs invest in a franchise because the franchise has a record of success, a strong brand, a refined training program, ongoing operational support, marketing assistance, real estate site selection assistance, purchasing power, and established systems in place that help lower risk. Therefore, it would appear to be in the best interest of the franchisee to implement the tried-and-true systems of the franchisor.

If you are considering a franchise as your business template, do yourself a favor and implement their systems, procedures, and brand standards consistently and correctly. The franchisor made it to where they are because they’ve successfully done it more than once. Therefore, their way is the proven way. You’re paying for their knowledge, expertise, and experience.

If you are going all in with a franchise brand, do your due diligence before committing. If after your due diligence you believe the franchise relationship would be a good fit for you, do yourself a favor and run the business the way the franchisor says it should be run. Develop a culture of execution and insist on consistently as you work to do things the way they were intended to be done.

Do these things and the odds of your business becoming one of the 30% that make it to the 10-year mark increases significantly.

Randy Stepp is a Principal Renaissance Leadership Group. RLG is a business and franchise development company that drives growth though the combination of strategy, purpose, and passion. We help business owners realize their dreams of independence and freedom.

Visit Renaissance Leadership Group at www.renaissanceleadershipgroup.com to learn more about business development