It Will Start Out Small...

I'll start out small and add employees later...

But, it turns out my “awesome” service business is really just a one-man show. And I'm the one man and I'm the whole show! This is not what I envisioned! Why did I pay a franchise fee?

Many people who have started service businesses find themselves saying exactly this sort of thing. When they got into the business, they did not intend to just create a job for themselves. They intended to achieve some serious goals. They set out to make more money than they used to make in their previous employee role. They wanted a better, more robust lifestyle. They wanted to be philanthropic with all the extra money they would make. They wanted to buy a nicer home. They wanted to take their family on vacations and buy nicer cars. They wanted to build wealth. They wanted to leave a legacy. Or, maybe, build something that they could sell at a substantial gain and have an awesome retirement.

In fact, those are the reasons why they bought a franchise instead of just trying to do it on their own. They understood that by investing their money in a franchise, they would get a shortcut to success. The franchisor would show them all the right ways to do things. The franchisor would show them how to make money faster. The franchisor would provide valuable things like branding, marketing strategies, customer service procedures, and even human resources support.

But, here they are 2, 3, 5 years into their business and it just didn't happen. They're working longer hours than they ever had before. They're not getting any time with their families. In fact, the weekends are totally jammed up with all the paperwork and gobbledygook back-office stuff that they didn't have time to get done in the 12-hour days they worked during the week! What in the world happened?

They'll say things like,
“I can't fit anymore customers on my schedule.”
“I'm doing all the work!”
“I am my own best employee, anyway.”
“It just takes time to grow a business.”
“I just need a few more customers, then I’ll hire an employee.”

You know what? They've given up. They've resigned themselves to not being able to succeed because they've allowed themselves to become an employee of their business. It's as if they don't even own the business. The business owns them. But, if you ask them why, they’ll start excusing the situation. They'll say things like…

“At least I don't have to deal with employees.”
“I'm actually in control of everything here.”
“I know I work a lot, but it's easier this way.”
“I don't have time to look for employees, anyway.”

In their minds, they will actually justify this sentiment. Things will bump around in their brains that are totally contradictory to everything that drove them to buy the franchise, in the first place! They’re thinking things like…

“This method keeps my overhead low.”
“I can live on this income.”
“Employees steal things. They break things They don't work as hard as I do.”
“Even if you want to hire somebody, there aren’t any good ones out there!”
“Besides, this is a low-paying, blue collar position. You can't trust that kind of employee.”

But every now and then they're going to think about it and realize that there's a problem. This is absolutely NOT what they set out to do. These notions will flash in their minds during moments of frustration…

“I can't take a vacation!”
“No matter how hard I work, I can't seem to get my income any higher.”
“I have to deal with everything and every customer.”
“I'm working a gazillion hours. This is killing me.”

Why did this happen?

It could be that this new business owner feared that their income would drop the minute they had to pay an employee. This is why making sure you are adequately capitalized to launch a service business is critically important. Maybe they're uncomfortable delegating the work and responsibilities that go along with the business. Maybe they were afraid that the employee will ruin the business, somehow. Maybe they're concerned that the customers won't be as happy with an employee as they are with the owner. These are all natural concerns. Hopefully, these are fixable issues and not a signal that this person doesn’t fit well with the business they started. These are all common concerns among small-business owners who encounter this situation. The real question is, what can be done about it? Well, there are several things that can be done about it!

First, accept that employees will use a different path than the owner to achieve goals. Just because they won't do things exactly like you would doesn't mean they can't achieve the objectives you’ve laid out.
And, you have to set very clear objectives for your employees. they need to understand the goals and targets you have for labor costs or cost of goods or any other metric that is meaningful.
As the franchise owner, you have to establish and clearly communicate your quality control guidelines. The same holds true for customer satisfaction targets. It has to be measurable and something that your employees can evaluate throughout the day, the week, the month.
Train and Coach your employees but don't micromanage them. This is extremely difficult for many, many people. It's quite natural to want to be over the shoulder of your employees all the time. Of course, you must do that at first. During the training phase of an employee and during their early tenure, there may need to be lots of oversight. But, as they become more confident in their new position and you are able to see that they have some capabilities, you need to let them feel the joys of success by empowering them to achieve the goals that you have laid out. It will be very difficult for them revel in their successes if they don't feel like they were able to achieve them on their own.

In service franchises, it's not uncommon for a franchisee to believe that they can't hire enough good people. Or, the franchise owner experiences a very high rate of turnover. In some industries, there is always a high rate of turnover. It is also typical that in blue-collar service businesses, there are concerns that employees might deliver a low quality of work. To add insult to injury, labor costs can be exorbitantly high if they're not managed well. So, what’s the strategy?

Most of the time, the strategy is a simple sounding pair of words. Over hire.

For some people, that's easier said than done. Many new business owners, franchised or not, become concerned that they might not have enough work for everyone. It can be surprising to learn that all of your employees will not always show up. If you are over hiring, you're always in a position to raise the bar on attendance rules and on rules regarding customer service. This puts you in the position to constantly cull the bottom 10% of your employee force AND to constantly be improving the base of employees that you're working with.

Companies that seem to have all the best employees do exactly this! It is a misconception that those companies have some magical way of hiring the best people in the market. They simply use a strategic method of constantly improving their employee base. It's those two words. Over hire.
There's another side to the coin. It can't just be about culling the bottom 10%. It also has to be about improving the top performers. You have to lay out a path for individual employee growth. This path will be different depending on what the industry or the business is. That's a completely separate discussion. But, by laying out an individual growth path that your employees have the opportunity to pursue, you will not only be culling the bottom 10%. You will be improving your top 10%. Once this strategy is implemented, businesses tend to grow faster. Because, now, you can always be acquiring new customers without being held hostage by too few employees. This is exactly why employee growth is what drives business growth in so many service businesses.

Contact Tim Church at 727-222-8485 or tim@thefranchiseconsultingcompany.com to hear about his experience in franchise development and ownership to see if it might help you.