Archive for the ‘Relationships’ Category

Sometimes the best way to learn something is to either do it wrong yourself or learn from someone else’s mistakes. I have had the pleasure of doing both. If you are thinking of franchising your business you have probably read, or been told about the pot at the end of the rainbow. Well like anything in life, if it is worth having, it’s going to be a lot of work. Here are three tips to avoid some disasters and maybe help you catch the leprechaun:

1) Mess of pottage. Why trade your franchisor birthright for a few dollars? In franchising, someone looking to buy your franchise will pay you a handsome franchise fee, some concepts as high as $50,000 at signing. The franchise fee is there to do a few things, like get skin in the game, cover the costs of attracting top talent to your franchise system, pay the tuition for all of you’ve learned, fund development of systems, etc. The challenge with such large franchise fees is that it’s often more money than you will get in royalties for a few years. Because of this, franchisors are more excited about closing that big deal than all the hard work to earn the royalties that come from years of business building; they trade their birthright to a share in a successful business for a short term boost to the bottom line. Some franchisors take all this money, go on a nice vacation, buy a new car, and don’t follow through with support. Not only is this not ethical, in my opinion, but it is extremely short sighted. Don’t fall into that trap, stay the course, support your franchisees, and make sure each and every golden goose is well fed and cared for.

2) Dictatorship. So, you’ve convinced a few people to buy your concept and on top of all that you have your 90 page franchise agreement signed, that some high priced lawyers put together for you. All the bases are covered- and the sweet talk stops, honeymoon is over and it’s down to business. Yikes. Nobody like being told what to do; if someone was smart enough to buy your franchise, they are probably smart enough to learn from your team, as well as your fellow franchisees. People like to be influenced, led, and shown your vision. Help them buy into not just your business model but, you and your team by demonstrating why your next big idea is one that they should adopt. I recently read a book called The Science of Influence; definitely one worth reviewing for those of you looking to see who prefer to use the carrot over the stick.

3) Partnership. I have often heard that a partnership is a sinking ship. In saying this, I will say that I have been fortunate to have some amazing partners, and that I have experienced the dark side of partnerships as well. When you consider growing your business, it is critical you get your business structure right, and if you have partners, roles and responsibilities are going to be critical to your success. Whether you form a partnership or not, there needs to be one President, CEO, Chief Pooh-Bah, or whatever title you make up. Every company needs a leader, so don’t make the mistake of approaching your business like a marriage, unless, you are into divorce.

There are plenty more things you could do to mess things up, but, I believe, if you watch for these land mines you are well on your way. Feel free to share your views on ones I missed.

Speed of Trust
I was on Facebook the other day when I saw a friend’s post about a book by Stephen Covey on the speed of trust. Curious, I did a quick read on the topic. Though I didn’t dig much deeper than that, I have thought about the idea of the book since. How much does trust impact business? How do you build trust quickly?

During the training of our franchisees we often discuss the fact that customers don’t buy from people they like, but from people they trust. If you can build trust quickly it usually leads to improved sales. The thing about trust is that it has to be authentic. In other words, if your only motivation for building trust is to improve sales you won’t be as successful at building trust.

Everyone has a different level at which they are comfortable trusting others. I think we all know people who blindly trust everyone (some may call them gullible). This continues until they get burned, after which they learn to be more cautious about giving their trust so freely. Some become cynical, feeling as though everyone is out to get them, and trust no one. Somewhere in between there is a balance of letting others earn your trust while also awarding that trust and maintaining the belief in the overall good nature of people.

So, in business, how important is trust? Can you even do business if you are not able to earn people’s trust or trust others? Having had a number of business partners to date, I argue that without trust you may as well not even bother starting a business with any partner. Trust forms the foundation of any strong business, partnership, employee or franchisee.

Back to the question of how to build trust quickly. Here is a link to Covey’s book’s synopsis. I think it’s worth giving a read. Having not read this book beyond the abstract and a couple forum discussions, I make the following observation:  Trust is likely the reason so many do business with close friends or family, where trust was earned outside of business and then extended to business dealings.

What do you think? How do you earn trust, and how do you award it to those around you? What is the number one thing that builds trust in your relationships?

Subscribe to D Scott Abbott
Copyright© 2009