Putting Advice to Work to Expand Your Business
Franchising World magazine brings readers insights from the industry’s high-achieving multi-unit franchisees who provide their views on currents topics of the day.
QUESTION: What is the best advice you’ve received to expand your business?
JONES: The best advice I’ve gained and applied is that with the right team, success is exponential and the sky’s the limit.
IKOR of DFW operates in a densely populated metropolitan area. There is a great need for our services both throughout Texas and nationwide. IKOR is a unique business model, and with only a little more than a dozen locations throughout the country, I saw a tremendous opportunity for growth. My most important condition for expansion is that we are able to maintain the consistently high level of service standard and integrity that our clients have come to expect and our prospective clients deserve.
An integral factor in my ability to grow the business is ensuring that I cultivate the right team. In any operation, the goal is to minimize expenses and maximize efficiencies; so, leveraging our human resources was a top priority in developing a strategic plan. The team at IKOR of DFW is both my largest expense and my greatest asset. Done correctly, hiring the right people isn’t an expense at all—it’s an investment. I am investing in the right people with the right skills who have a passion for helping others. I need people who can match my drive and support my mission to serve. While I have experienced success individually, I am limited by what one person can accomplish.
KING: The best advice I’ve gotten was to make sure you have your infrastructure in place prior to expanding—your marketing, accounting, general and district managers, CEO and CFO, and so on. That’s a challenge. As you look for the funds to support ramping up, you don’t want to put too much burden on the first stores, but if you don’t have the right infrastructure in place, by the time you get to four or five units it’s too late.
When you start to have multiple sites having to handle invoices and checkouts, it is imperative to have the accounting piece ready. As for marketing, The Greene Turtle’s reputation precedes it, so new locations are busy after opening. But you don’t want to wait too long before you get out your marketing efforts so you can stay relevant and keep the traffic flowing. You need the marketing piece in early.
Similarly, the management piece is important to get in place as early as possible. Each unit will, of course, have a general manager, but it is imperative to have a support structure in place. Otherwise, you have different policies in each store and that becomes an issue as you try to streamline your operation. If, for instance, you want to be able to shift employees around to different locations from time to time, you can take a manager and drop him or her in a new store and to hit the ground running if that manager is doing things the same way no matter where he or she is.
Probably the most important thing we did was to take the hit early. We found the right people for each role so that as more of our Greene Turtle units came online the transition was smooth. We are so glad we did that and now it’s easy to add to the infrastructure and will continue to be as we add more units in the future.
MONROE: Passion, motivation and communication are key elements to any business; however, they are critical to the success of a small franchise business owner. My passion for child development has led me into the world of multi-store ownership with the Learning Express Toys franchise. I truly believe the key to my success has been developing a rapport with my customers, offering a unique mix of specialty toys and providing consistently exceptional customer service.
Expansion is inevitable when all key components are in place. With this said, I can share some advice that has guided me through the process of my own store expansion. Over the years I have learned that as I increase the amount of properties I acquire, I should try to achieve a lower rent for each new location. If possible, the rent expenditure should be less per square foot than for the previous one. In addition, you must have good management and staff in place prior to any expansion to ensure success.
Consistency is also critical as it relates to policy and procedures. It is imperative to use the same standards when analyzing processes and procedures to determine store profitability and efficiency. There needs to be a consistency factor between all the stores as we expand. This strategy makes it easier to maintain policies across stores, as well as to have established procedures for hiring and laying off employees. Additional locations enable more efficient purchasing, as I now have the ability to distribute stock between all stores, as well as spreading the expense between locations. The last critical factor in expansion is confidence in the area where the new store will be located—doing your due diligence when scouting out new markets is absolutely essential.