How Do You Scale Your Multi-Unit Business? Rinse and Repeat

Rinse and repeat, rinse and repeat, rinse and repeat.?

That is how you scale your business through owning multiple units/locations and through scaling to build an empire.?

But let's think about how you’re able to build that empire. In many cases, you’re scaling via? owning multiple locations/units of semi-passive business, a semi-absentee business.?

There are other ways to scale your franchise business, but today we’re going to focus on Multi-Unit Ownership.

Semi-Passive Businesses

What I think surprises most people when they hear about a semi-passive business is that most of them are brick and mortar. Most of them have physical locations and are likely not home-based (note: you’ll find a few exceptions).

For the most part, the way you’re running this kind of business is by managing the manager.? You’re finding a great person who has skills needed in the given industry to run the business as a general manager. The key is finding that first, great hire. Keep in mind, you may need to pay for a good employee in some way shape or form. Most owners like to dial in a pay-for-performance component to keep that person employed with them and motivate them to increase the business. In fact, some owners like to give that key person an ownership stake in the business, 10% for example.??

When I talk about these types of businesses, I am talking about beauty, automotive, health/wellness/medical and a lot of different industries where you're probably not licensed to do the work, but the key staff needed to do that work is licensed or trained to perform. That's the important thing.

So what is your role as an owner? You might be back on a computer looking at the Key Performance Indicators (KPIs) to see what levers in the business. Oftentimes, you have security cameras set up in the business so you can check out what’s happening in the location remotely.

If your business is a membership model, are your people following the sales process to get the members to sign up? Once you have the right number of members, do you need to pull back on your paid marketing efforts? Do you need to have your team focus on more organic social media marketing? Do you need to hire more employees to provide the services? Are you meeting your profit and revenue goals?

The franchise will help you understand when to pull and push these levers. What do you need to do? You're managing the manager. Keep in mind that you really can scale your business that way.?

Scaling Your Business

How are you actually scaling that business going from one location to scaling by adding more and more? Let’s go back to the idea of rinsing and repeating. You're essentially taking that general manager that started that first location and if they're very strong, as they should be, you can move them to that second location. Maybe you've promoted somebody from within or found somebody else to take over the role of the unit/location that's already up and running and doing well. Then you go on to the next? location, “rinse and repeat,” and onto the next and next by continuing to “rinse and repeat” and you go onto the next. It’s a great way to scale.?

Oftentimes, you’ll need to purchase the licenses to scale multiple units when you buy into the franchise. If you don’t buy the licenses up front, you risk someone else purchasing your key territories. Keep in mind, you’re typically only purchasing the franchise fees for the subsequent units up front and will likely get a discount if you buy three or more licenses.??

Most franchises give you a development schedule so you don’t need to develop more than one unit at a time…unless you so desire. Typically, you have a 12-month window to open each subsequent location. I’ve seen 10-month windows for franchises where it’s easier to find a professional (think medical) space to lease. It’s important to ensure your financing will accommodate your development schedule before you sign on the dotted line with the franchise.

As the business grows then that general manager who was so strong can be the area manager and so on and so forth. Over time, you probably are spending less time in the business once the business is up and running.?

Q&A Session

If you're interested in learning more about these kinds of models, I'd love to talk to you about it. Come to my question and answer session. Go to www.bizbuyown.com or scan over the QR code.

Keep in mind that all my services are always free of cost to you.