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Monday, July 02, 2007

Have You Become A Busy Fool?

Are You A Busy Fool?I received an email from someone today and I thought it was so extremely interesting that I would share it with you.

This person is very successful and works hard to make a good living for himself and his family.

I knew him before I went into my own business and I've done operational reviews for him and he's also given me occasional pieces of invaluable advice.

He Wants To Franchise His Business 

He really wants to franchise his business and has talked about it several times over the years.

What it said was as follows(I've changed a few words to protect the innocent - they're in italic/bold font ):  

"Jim ...

I have felt for some time now that I have become a busy fool! Keeping busy for no other reason than to operate a business and keep everybody else happy except ourselves.

The New guys sales should generate enough revenue to cover his cost. But that isn't really the purpose! is totally absorbing both physically and mentally and currently does not generate enough profit to grow the business through franchising. With the previous salesman, the extra business he produced just put me under more pressure to do his projects, some of which were not even feasible and had to be re-checked.

This new guy is not just a salesman, he is an all rounder, like me, able to sell, deliver and handle difficult clients.

This will release about 50% of my time to focus on developing other more profitable avenues.

In theory this business should be perfectly franchiseable, because I am training new people to do exactly what I do; the hard part is training up and keeping your workers. They are the real challenge to this business, and want a lot of money, which is probably why most of the franchises involve the worker becoming the franchisee to keep him on stream.

The problem then becomes how do you find a good worker, who can sell (most good ones can't) and run a business as well..." 

What Does All This Hard Work Mean?

Firstly this gentleman is a star salesman so he's able to make an astonishing number of sales, despite also having to help his workers deliver. That means he's extremely busy.  And whilst the business makes him a reasonable income it's not enough to allow him to step back and think about what he can do next.

Normally the workers he uses are trades people who would have to sell themselves to get work. As it is he gets them a lot of work. That means the amount of selling they need to do themselves is much reduced. Therefore, if they're working more they're earning more and they have much less "dead" selling time.

As they are not part of his company he is acting as their agent and the profit he makes through their work is effectively a sales commission.

And I think he feels a pressure to continue to get sales so that they can all earn money.

Therefore, at the moment the business relies heavily on a star salesman. OK he's taken on another salesman and hopefully that means he can step back and think through the strategic steps needed to be able to franchise the business.

Is Franchising This Possible?

It's not impossible...

However, he has identified the major issue with the franchise route: good workers don't seem to be able to sell and run a business too.

The steps he needs to take are strategic. He needs to be the company people go to for the service he offers.

Once people come to him he has a franchisable idea.  

How Do You Get People To Come To You?

There needs to be ways of getting repeat business and referrals from previous customers. 

Repeat business means having a backend for selling other items or services to your customers.  To reduce the risk of lost backend sales the backend should require little or no effort from the franchisee. And once set-up a backend should need little or no help from the franchisor.

The franchisee and the franchisor should each get a share of the backend generated by the franchisee's customers.

Once the backend is proved think what a massive benefit that would be to a new franchisee. And each franchise would generate a percentage of backend income to the franchisor.

Then of course he needs a referral system.  He does get some recommendations from satisfied customers but getting referrals is simply not systematised. That means it's likely that he could get extra sales with less price resistance and less work.

The reason he doesn't think strategically is because he as he says he had, "become a busy fool! 

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