It’s easy to start a business. Anyone can do it. But not many can keep it going, especially for longer than 5 – 10 years.
Maintaining and scaling, or growing a business, often determines its ultimate success or failure.
What is your plan to keep your business going? Do you hope to scale your business?
Since the majority of small business owners experience collapse within the first year, we can safely assume that scaling is an area of risk. Fast scaling, if not handled wisely, can result in major problems and can be the beginning of the end.
One entrepreneur who got it right, is Denis McFadden, founder of the Just Cuts franchise. Mcfadden started his brand in 1990 and which, 27 years on, has grown to 200 locations in Australia, New Zealand and India. Just Cuts is the largest hairdressing franchise in the southern hemisphere.
“Just Cuts is a commonsense approach to hairdressing, bridging the gap between the barber shop and the conventional salon. We specialise in cutting for men,women and children. Just CutsTM was founded on one simple idea – that people want quality style haircuts from a qualified Stylist, at an affordable price. This notion changed the hairdressing industry forever and still remains the purpose of Just Cuts™ today, 27 years on. ”
McFadden used certain principles to drive growth. A lot can be learnt and applied to our businesses.
Business Systemisation – The Success Factor
Just Cuts used the franchise model as a growth strategy and attribute their franchising success to business systemisation which resulted in a confidential operations manual which is the core of the franchise business. It’s value is to make certain that the same standards are practiced at every Just Cuts location.
It includes basic training and the principles that govern the business, from daily salon tasks to safety and the retailing of their products.
The operations manual is the business because it provides the method of how the company assesses and monitors every franchise. When Just Cuts started their first franchise, their core business was no longer about hair, but rather about franchising.
The guarantee for franchisors is that if they follow the systems, their location will succeed.
Further to that, when people buy a Just Cuts franchise, they are buying a business they can work on instead of in, which eliminates a common problem small business owners face: that of becoming a hard worker in their business instead of the entrepreneur they initially strived to be.
In an industry not generally known for systemisation, McFadden says, “We’ve tried to bring monitoring and motivation and key performance indicators to an industry that’s untouched by big business, at least in Australia.”
For McFadden, the key to successful franchising is systematisation.
While systematisation, together with some other tools, helps the company achieve consistency and brand reliability, McFadden says of one potential scenario, “It’s possible some staff have a bad day. That’s why you’ve got to systemise [the process]. But I can’t systematise a smile, that’s why in the recruitment phase you’ve got to find people who like people.” This quality undoubtedly features strongly in the guarded operations manual, which is the franchise’s key success factor.
Just Cuts employ people who love people, and this achieves one of their desired outcomes. Because this factor is in the operations manual, every franchise owner will follow suit, only hiring people that love people.
Marketing the Right Message
Growing your business also requires smart marketing. Just Cuts use a PR firm to help solidify their brand, to get more franchisors on board. They know they need to focus on their core value, which is franchising. This is yet another reason why business systems are so important, because marketing, like the other essential tasks in your business – is still something that needs to get done if you are to grow, and systems make it easier to carry out these tasks.
Franchising as a Growth Strategy
McFadden, who started Just Cuts, “accidentally” implemented the first franchise just one year after starting the brand in 1990. For him, it was lucky someone wanted to open a salon with the Just Cuts brand, and so the franchise began, but franchising as a growth concept needs to be considered carefully because once you start a franchise model, your core business is no longer your core business. Instead, franchising becomes your core business, and your company needs to be ready for that.
When scaling up, there is a danger of growing your business too fast. Before embarking on any growth strategy, make sure that you do a complete analysis of your business. Do you have what it takes in place? Are your systems, policies and procedures up to scratch, will they support your growth?
Business systemisation sets the foundation for stable, faster and intelligent growth whenever the business is ready for it.
Just as Just Cuts found, the major benefits of setting up business systems early on are that it ensures consistent service and standardisation of repeatable tasks, no matter who will be performing them. The franchise was designed to give the assurance that the brand reputation is protected. Applying this concept to your business, you are able as the owner to let go of the reigns, knowing that things are being done as you want them, even when you’re not around.
So there you have it. To summarise, before forging ahead with scaling your business, make sure:
- You have enough income and capital for higher operating costs
- You have the right technology to handle growth
- You can manage customer demands while transitioning
- The right processes and business systems are in place
- You know what kind of people you want on board
- You have developed and documented your strategic objectives, your guiding principles and communicated your values and vision to your team and clients
If you need systemisation in your business, book a free consultation with me. It’s time to get clear on the what you should be doing to grow your business.