As an entrepreneur, I'm sure you remember the time before you started your business and probably worked for someone else. Most days, there would come a time where I stared at the clock, wondering when I could escape the confines of my job. I think, in general, I did good work and was a decent employee, but I know I didn't fill the room with a burning desire to make the company more money.
Then, one day, I started my own business and my entire world changed. Work weeks all of a sudden included Saturday and Sunday, a light week was 80 hours and it was fun to try hitting a 20-hour work day. So if we, as business owners, are like this, why should it be any different for our employees? The fact is, human nature inherently drives us to care more about something we own than something we are given. Employees are less likely to be as driven and focused on their work as a business owner is.
It comes down to the simple concept of having "skin in the game." When people have their own money and rear end on the line, they tend to work harder and be more focused on the results. This trait is extremely apparent when comparing strategies to grow a business in new markets. Managing employees when scaling a business makes the responsibility of keeping your staff motivated even more difficult, because you can't see them every day and monitor their work like you could if they were in the same location. I had a client in the oil services field say this to me after opening several franchise locations: "I can't hire someone for $100,000 a year to work as hard as the guy who just invested $100,000 to open a business doing the same thing." For this reason, I feel franchising has success in a wide range of industry segments.
So why don't more businesses leverage franchise growth as a way to expand? It seems the first factor is just fear of the unknown—some business owners don't understand franchising and therefore choose organic growth or other options. In reality, the franchise model is a pretty simple concept, much like a partnership, but with better structure and less "gray area" in the agreement, which can plague partnerships.
The second factor that seems to steer business owners away from franchising is the fear of losing control by opening the business up to franchisees. The first thing I ask business owners with this concern is how much control they have over employees in a location they aren't overseeing every day. Generally, the realization is that franchising offers a different kind of control. Not the same control you might have if your management style is dictatorial and people respond to you because you're good at cracking the whip, but a control that is inherent when you put people in charge of their own destiny and they become accountable for their own profitability.
The bottom line is that growing a business can be scary and means some version of change for you, your operations and your bottom line. With that change in your business, you may want to consider franchising as one of the options to fuel that growth. Ultimately, you want to avoid comparing franchising to how you currently run your business—instead, it's important to weigh it against other growth strategies available.
For more tips on expanding your business, access Business Growth: How to Survive and Thrive, from MSNBC’s Your Business.