Franchise,and,Basic,Concepts,B business, insurance Franchise and Basic Concepts of Business

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Normal 0 false false false EN-US X-NONE X-NONE In order to truly understand the concept of Franchising, an exploration ofthe basic concepts of business is required. There is no magic in that. It justmakes sense in order to provide clarity about the Franchising strategy.Franchising is not a business in itself. It is a business strategy. It's abusiness system. That's a significant distinction that isn't always clear.McDonalds is in the fast food business - although many people feel they arereally in the real estate business, while others think they're in theentertainment business. Regardless of that discussion, they are not in thebusiness of Franchising. Schooley Mitchell Telecom Consultants is in thebusiness of telecom consulting. Ramada is in the business of operatingproperties. Snap-On Tools is in the business of selling tools.Each company uses Franchising as its strategy to penetrate and dominate themarketplace. However, their core business relates to the products and servicesprovided to their customers, using the Franchising strategy to deliver thoseproducts and services in a consistent manner. A more in depth discussion of theFranchising concept will follow, but first we need to delve into the basicconcepts of business. If someone says to you that they're in the business of Franchising, theydon't really get what they're doing. It's all about the customer, and if thefocus is not on the customer and their needs, then something is awry. Customersdon't need a Franchise. They need hamburgers, telecom consulting, hotel roomsand tools. So therefore Franchisors are not in the business of Franchising.It has to be about the customer doesn't it? After all, the customer pays foreverything. They pay for salaries, they pay the rent, they pay the utilities,they pay for the costs of delivering the product or service, and they pay theprofit. In businesses using the Franchising strategy, the customer pays theroyalties, the customer pays for the development of the system, includingsupport and operations, and they pay for everything the business does in itsday-to-day activities, both Franchisor and Franchisee. At Schooley Mitchell, we have a credo that says that 'Good is the Enemy ofGreat'. It's not absolutely original, but we hope our approach is just that.First of all, if greatness is to be achieved, focus must be completely on thecustomer. We have to continue to strive to have our customers clamor for ourservices. If we're satisfied with being good at it, we'll never be great. Iwant to be great. We want to be great. Our focus must be entirely on thecustomer to achieve that goal.Purpose of BusinessO.K, so let's look at the purposes and objectives of business, regardless ofwhether the goal is to be good, or great. I don't think anyone has a goal to bebad, so we'll leave that one out. First of all, the basic purpose of businessis to make money. It is not about your way to give back to humanity. That's acharity. People that wish to be in business for themselves are doing so inorder to make money. That shouldn't be a surprise to anyone. So how do all businesses make money? As stated above, they focus on thecustomer. Therefore, the purpose of daily activities, the objectives ofbusiness, are to get new customers, satisfy those customers, keep thecustomers, and grow business, either with, or through those customers.Get, satisfy, keep, and grow. There you have it. These are the purposes ofbusiness. They form the first set of four in a concept we have developed atSchooley Mitchell called our 4 By 4 Concept. The other four will be discussedat a later point. You can't think of a transaction that happens in businessthat isn't aimed at one of these four things. The key is to understand thatthey are four distinct things, and they each require distinct strategiesdesigned to achieve excellence in all four areas if greatness is to beachieved.GetMost people 'get' this one. This is sales and marketing. Peter Drucker saidthere are only two things that create value in business - sales and innovation.The rest are costs.I would suggest that many companies tend to become happy with their existingsuite of customers. Or they land the 'big one' and all is good. I would alsosuggest that if there are not constant strategies put in place to continue toget new customers, to get new blood, then stagnation will follow. Landing the'big one' can actually put the business in a very precarious position. It'scalled over-trading. If the business relies too heavily on one source for itsrevenues it can be in big trouble if something goes wrong with that customer.The solution to over-trading, and to keep generating a steady stream of newcustomers in order to keep any business vibrant and moving forward, is toimplement great 'get' strategies. And never quit. That's certainly not rocketscience, but it is a basic tenet of long term survival.General Motors should have been trying to figure out how to 'get' Japanesecustomers in the 1970's. That would have led them to understand how to 'keep'North American customers. Enough said.SatisfyA lot of people really miss the boat on this one. I actually saw a truckdrive by me recently that had a slogan on the side in proud, bold letters thatsaid 'We Deliver Satisfied Customers'. They seemed to be quite proud of thefact that they actually provided what they sell. All customers for allbusinesses expect to be satisfied or they wouldn't complete the businesstransaction in the first place. Boasting that customers are satisfied is likesaying, 'we don't rip you off'. Well, big deal and thank you.Satisfaction must be a given. It is required for survival. It is certainlyone of the four main purposes or objectives of business, but it is so oftenmisunderstood. Satisfaction is what people buy, so they expect it to be delivered.Michael Vickers, one of our Sales & Marketing instructors at SchooleyMitchell, says that 'Whatever company, in whatever industry, sets the standardin customer service, moves the bar up for all of us.' It's a great message. Wemust constantly be wary of what customers expect in order to be satisfied, andit's an ever-increasing standard. However, it's nothing to brag about. It'sjust what you sell.In a book called 'If It Ain't broke - Break It!, Robert Kreigel wrote,"Embrace the unexpected. The only thing that won't change is thateverything will keep changing. Today's skills, knowledge, and products livefast, get old before their time, and die young. The overnight letter, which wasthe innovation of the 1980s, is now used only when you're not in a hurry."He wrote that message 15 years ago! It's a clear, and still valid, indicationthat we need to continually re-tool to meet customer satisfaction goals.KeepIf satisfaction is a constantly moving target, and satisfaction requiresever-increasing effort and commitment, then to keep customers requires morethan just satisfaction. Customers expect satisfaction. They buy satisfaction.People will copy satisfaction. If that's all that is provided, then it comesdown to price, and that's a losing game no matter what business is at hand.Therefore, strategies are required to provide more than what the customer buys,in order to maintain long-term trusting relationships. Michael Vickers says to"take a standard service offering and up-level it." That defines the'keep' strategies that a business must employ. Ignoring this one will againcreate stagnation or denigration.Grow Most of us have heard that it is less expensive to do more business withexisting customers than to obtain new ones. It is my belief that you must doboth. In order to do more business with existing customers, there have to beconsistent strategies in place to educate them about new products and services.In addition, you must understand their business, particularly as it changes, sothat it becomes apparent when your products and services can be provided. Youmust also put practices in play to ask for more business. Complacency is toooften the norm when opportunities are in front of us. Companies that implementprocesses to ensure these things are managed will continue to grow business viathe grow strategies.The grow strategies also include asking existing customers to support you inyour business growth through others. It's surprising how many people would bewilling to help if they are requested to do so. Things like referrals,testimonial letters, agreeing to act as a reference, and introductions to theirassociation are all offshoots of this strategy. So there you have it. These are the four basic objectives of any business.Business needs strategies and formulas to continually get new customers,satisfy them, which is an allusive and demanding standard, keep them, whichrequires more than delivering what you get paid for, and grow business withthem or with their help. These are the basic concepts of business, and theymust be at the heart of every good business, and every good Franchise system.Evaluating a Franchise system should include an assessment of how well theFranchisor understands these concepts, and how well they execute strategies tomake them happen.To receive a free copy of an E-Book titled 'Franchise Opportunity - MakingThe Right Decision' by Dennis Schooley, email that request to [email protected]. /* Style Definitions */ table.MsoNormalTable{mso-style-name:"Table Normal";mso-tstyle-rowband-size:0;mso-tstyle-colband-size:0;mso-style-noshow:yes;mso-style-priority:99;mso-style-qformat:yes;mso-style-parent:"";mso-padding-alt:0in 5.4pt 0in 5.4pt;mso-para-margin-top:0in;mso-para-margin-right:0in;mso-para-margin-bottom:10.0pt;mso-para-margin-left:0in;line-height:115%;mso-pagination:widow-orphan;font-size:11.0pt;font-family:"Calibri","sans-serif";mso-ascii-font-family:Calibri;mso-ascii-theme-font:minor-latin;mso-fareast-font-family:"Times New Roman";mso-fareast-theme-font:minor-fareast;mso-hansi-font-family:Calibri;mso-hansi-theme-font:minor-latin;mso-bidi-font-family:"Times New Roman";mso-bidi-theme-font:minor-bidi;} Article Tags: Basic Concepts, Franchising Strategy, Schooley Mitchell, Customer Pays, Make Money, Grow Business, More Business, Existing Customers