Semester 1- Class 3 Turn Key Copyright 2007 Duane Hoversten – Instructor South Central College.

Semester 1- Class 3Turn Key

Copyright 2007

Duane Hoversten – InstructorSouth Central College

Use the Turn Key Franchise Idea

The Franchise Phenomena

McDonalds - The most successful small Business in the world.

Franchises

Trade Name Franchises Coca Cola - Cadillac

Business Format Franchise An entire system of doing

business TRUE PRODUCT OF THE

BUSINESS IS THE BUSINESS ITSELF..

THE HAMBURGER WASN’T THE PRODUCT - THE BUSINESS WAS..

Business Format Franchises

95% Success Rate in 1st Year

75% Success Rate for Business Format Franchises in 5 Year Period

McDonalds: cleanliness - satisfy the customers every time

Learned at Hamburger U

Business Format Franchise

“Proprietary Way of Doing Business that differentiates every Extra-ordinary business from one of its competitors.”

•How do we build businesses to make that idea work for us?

•How do we make businesses that work predictably and profitably every day?

•How do we get business owners in control of their business rather than the businesses controlling the owner/manager???

MAJOR QUESTIONS ARE:

We Created a Turn key Business for Wayne

Created goalsCreated Organization Structure Hired a bookkeeperCreated scheduleDid last two years taxesCreated paperwork to track jobsCreated paperwork to track work on

jobs

Your Business in Not Your Life!!!

A Business Owner must understand that the primary purpose of a business is that it serve him/her not that he/she serves the business.

Work on the Business Not in the Business..

What is a Franchise Business Rules –There will be 50 more stores or locations like this one1 )The Model will be consistent value for: Customers Employees Vendors Bankers etc

Business Rules Continued:

2) Business will be operated by Lowest Possible skills If business needs high skill level, you

can’t replicate it WE develop tools and keep improving

the tools for this business If we assume low skilled labor, we

acutally build systems that will work

Business Rules continued

3) The place will stand out as a Place of Impeccable Order A business that looks orderly has

customer’s assuming you know what you are doing

A business that is orderly will have it’s employees believing in what it does

A business that is orderly has structure in place

Business Rules

4) All Work will be Documented in Operation Manuals There is a “way” to do every job

(cleaning bathrooms) Employees want structure to full fill

their psychological needs of their job It states the purpose of the work

Business Rules

5) The model will Provide a Uniform product to the customer Get a great big steak one time Get a small steak the next time Even if it was good, you now ask what

next??

Business Rules

The model will have a uniform color, dress and facilities code Colors are important

More sales wearing a blue sport coat than any other color

Shapes are important Uniformity is important

Create a Turn Key Business to Sell- Same Requirements!!!

The model must be consistent and create a consistent Value to Customers, Vendors, and Employees, and other stake holders.

The model will be operated by people of the lowest skill possible

The model will stand out as a place of orderAll work will be documented by operation

manualsThe model will provide uniform customer serviceThe model will have a uniform/office/car/building

code

Systems in Your Business

FinancialMarketingHuman ResourceManagementOperationsRisk Management

Financial Systems (Procedures)

100 Billing and Collections110 Budgeting120 Cash flow Measurement130 Financial Statements140 Inventory Control Systems150 Pricing System170 Purchasing System180 Tax Preparation190 Vendor Selection

Marketing

200 Lead/Quote Generation210 Marketing Budget220 Marketing Calendar230 Marketing Measurement240 Sales Training250 Marketing Plan

Human Resource

320 Job Descriptions330 Recruiting/Hiring340 Training350 Employee Manual370 Payroll System380 Personnel Files390 Wage Scale

Management

420 Business/Strategic Plan430 Communications/Culture450 Organization Structure460 Planning/Time Mgmt/Goals470 Professional Partners

Operations

520 Costing Measurement530 Customer Satisfaction540 Phone Answering560 Production Measurement570 Mail575 Office Supplies

Risk Management

620 Data Backup630 Emergency Plan640 Insurance650 Key Employees670 Safety680 Security

Business Area & Systems Worksheet

Business Areas and Systems Work Sheet

Business Area:___________________________System:___________________________ Procedures/Activity:

1.___________________________________________________________

Who:________________________________________________________

When:_______________________________________________________

Where:______________________________________________________

Why:________________________________________________________

What:_______________________________________________________

_______________________________________________________

_______________________________________________________

End Class 3

Next Class October 20 at 8 am Finish Emyth

Read Chapt 10-14 in Emyth Creating Business Systems