The McDonald's Formula

The food chain McDonald's is one of the most successful businesses in the world. It is not one business doing many branches - but many small businesses doing one formula. Each small McDonald's business produces the same burger worldwide, and anyone can do it.

When Ray Kroc stumbled into the first MacDonald's (yes, with an "a" in it) in 1952, he was astonished by the efficiency and speed of production, and the low cost of the product. He convinced the owners to franchise the method. 40 years later McDonald's was turning $23-billion a year, with 15,000 restaurants worldwide.

Putting what we think of their burgers aside, what made McDonald's rock? It was that they had a system - and that system was fully documented, in manuals and what are now called Standard Operating Procedures (SOPs).

Remember, I told you in my last post that your business is a "living" entity? Being an entity, it can be sold, it can be duplicated, and the people working in it can be substituted. But these can only be done when the business and its processes are put down on paper in a logical way.

Is your business all in your head? Then your business has no value as an entity. I keep hearing of people wanting to sell their businesses without documentation, and finding that no one is interested. Or people wanting to hire employees but dreading the time they would have to spend training them.

Start writing down all the processes in your business; how and where you do the accounts, your telephone answering scripts, the operating procedures for all the processes. You can start with simple bullet lists. If you want to be really smart, use Lyx, a word processing software which will produce beautiful documents with the sections automatically numbered.

If you are still overwhelmed by the task, enlist the help of someone else. There are even professionals who can help you document your "intellectual capital." If you are in New Zealand, I can recommend Veronica of Esemel.

Documenting your business will take some time, but will bring many rewards:

• It will clarify your understanding of your own business, and help you identify qualities and weaknesses.
• It will help you clarify and review what you want your business to become.
• It will make it easier to employ staff, and delegate roles.
• It will provide consistency of decisions and shared understanding.
  
• It will increase the final value of the business when you want to sell it.
• It will help you create a prototype model that can be sold as franchises, multiplying your income.

If your business is all in your head, clear it out now, and put it on paper.

Best wishes of abundance to you.

Welcome to Your Successful Business!

Have you discovered that your business is a bigger chunk than you can chew? Do you sometimes have that heart-dropping feeling that your new (or now slightly old) enterprise is beyond your capabilities?

Did you start your business because you were good at doing something (like making chairs or designing books), only to find out that sustaining that business took more and more time away from what you loved doing?

You are what I shall call a Reluctant Entrepreneur. You might love your work, but you are afraid of, or have even grown to hate, what it takes to make your business successful.

Michael Gerber in his best-selling book The E-Myth Revisited, said that 80% of startup businesses fail within the first 5 years, then 80% of the ones that make it past 5 years. His assertion is that the people went into these failing businesses for the wrong reasons. Perhaps you are not alone!

I have been a Reluctant Entrepreneur for 20 years, first as a photographer, then as a natural health practitioner. I kept asking myself, "why am I so ignorant about marketing, accounts, etc., and why do I hate doing it?" I thought I wasn't cut out for it, I thought that successful businesspeople were a breed apart.

Gerber said many people go into business to be self-employed technicians (i.e., photographers, flower arrangers, naturopaths or whatever). They didn't realise they also had to become Managers as well as Entrepreneurs. These technicians end up working in their business, but not on their business.

When you start a new business, you give birth to a new entity. It could be named after you (Mary's Pies), but it still has a life of its own.

Once you understand this point - that every business has a life of its own - you are on the road to recovery. I will show you what are the organs of a business and how to nurture it to good health.

The second point to understand is that successful entrepreneurs are not necessarily MBAs, and are not a super-intelligent race who speak a strange language. Most - maybe all - of them are human beings with a passion for what they do, just like you. I will explain things in simple terms, gently introducing you to the new concepts and language.

The 21st century approach to business is changing. The era of suits, impressive offices, and hard sell has come and gone. It is now about passionate people filling needs, working from virtual offices, and meeting at cafes. Every aspect of business is becoming streamlined, simplified, more natural and human. Rather than a few big corporations in stone buildings, its now about zillions of small businesses operating everywhere - in small shops, malls, homes, street markets and cyberspace.

The third point to understand, is that for you to know what you need to do for your business, you need to know what you want your business to become. How do you see the business in 5 or 10 years? Will you still be working solo in it, or will you be employing a team to do the work? Will you be able to sell the business when you want to leave? Will you be able to sell business packages to others who want to start a similar business?

The main thing is, you are not alone. Stick with me and I will share with you what I have learned - let's grow together.

So, make sure you keep up with me as I write this blog. Click on the link to get an RSS feed, which sends you updates of this blog. And feel free to make comments and ask questions.

Every blog will give you something to do. Please do it! A little bit every day soon turns you into an expert. For now, please clarify and write down how you see your business in 5 years and 10 years.

All the best.