entrepre turn key
TRANSCRIPT
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Building the Business that Works
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The Turn-Key Revolution
1. Turn-key revolution, similar to the Industrial ,
Technology & Information Revolution has
changed the society
2. Transformation from Chaos to - Order,
Excitement & continuous Growth
3. The ultimate balanced model for business
that works
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The Franchise Phenomenon
1. In 1952, Ray Kroc, the Milkshake machine sales
man visited MacDonalds stand, he saw amiracle
2. Hamburgers were produced quickly, identically
and inexpensively3. High school kids were working under the
supervision of manages
4. It was not a Hamburger making but a Money
making machine5. After 12 years he convinced them to allow him
to franchise their method and bought them over
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The Most Successful Small Business in the
World
1. In 40 years McDonalds has become 40 Billionbusiness
2. 30,000 restaurants world wide, in 120 countries
3. Serving 50 million people every day
4. It is the largest Prepared food distributionsystem in the World
5. Represents 10 % of the gross restaurant revenueof America
6. More profitable than almost any other retailbusiness in the world with 17% pre-tax profit
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Franchise Business
1. McDonalds has created a model, on whichentire generation of entrepreneurs have builttheir fortune
2. In 2000 there were 3,20,000 franchise business,
in 85 industries with 1 Trillion in sales
3. Accounts for 50 % of every retail Dollar sold inthe US
4. Largest employer of high school kids in US5. Only 20 % failed in the first year of their
operation as against 80 % start ups.
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Business Format Franchise
1. Early Business format -TradeName Franchises.Success of the business runs on the success ofthe product it sales e.g. Mercedes &Coca Cola
2. The Brand is difficult to create and sustain
3. Business format Franchises provides thefranchisees with entire system of doing business
4. True product of the business is the business
itself5. At MacDonalds, Hamburger is not the product,
McDonald's is.
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Selling the Business instead of the
Product
1. Ray Kroc had a Huge dream but very littlemoney
2. He began to look at his company as a product
and the franchisee as a customer3. The franchisee was not interested in a
hamburger but in the business, does it work?
4. He was not competing with other hamburgerbusiness, but every other businessopportunity around the world
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Creating a business that would work
once it was sold
1. No matter who bought it.2. Forced to create a full proof predictable business
3. System dependent and not People dependent
4. A business that would run without the owner5. Ray Kroc went on to work on his business not in it
6. Pre production Prototype of a mass product ablebusiness
7. Each unit worked exactly like the first one likemodel T
8. Turn Key Revolution, like the Industrial Revolution
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The Franchise Prototype1. For the Franchisor, Prototype becomes model of
the dream - Nursery for all creative thoughts.2. Prototype acts as a buffer before putting ideas
to the real world
3. French fries are left in the worming bin for 7
minutes and the thickness of the Patty is not tobe compromised, pickle has to be placed at acertain place in the dish
4. Discipline, Standardization & Order are the
watch words5. Expectation is fulfilled exactly the same way
every time
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Turn- Key
1. Each franchisee has to attend the HamburgerUniversity not only to learn how to makeHamburgers but to run the system which
makes Hamburgers2. The franchisee is licensed to use the system
and Turn the Keys. The business does therest
3. This works at Disney World, SubwaySandwiches, KFC & Dominos
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Works for all 3
1. For the Entrepreneur, the Franchise
prototype brings its vision to reality
2. To the Manager it provides order, system and
predictability
3. To the Technician it gives him clarity
4. For the Business person it gives a balance for
all his 3 personalities
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Working On Your Business
(Not In It)
1. Your business is not your life. They are two
different things
2. The primary aim of your business is to serve
your life and not the other way round
3. Assume that business that you create will
become a Prototype of 5000 more like it
4. 6 Rules that will make you to win
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6 Rules for working on the Business1 Model provides consistent value beyond the
wildest expectations of all the stake holders
2 Operated by people with lowest possible level ofskills
3 The Model will stand out as a place ofimplacable order
4 All work in the model will be documented in anoperations manual
5 Will provide uniform service to the Customers
6 The model will provide a uniform color, dressand facilities code
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The Model will provide a consistent
Value
1. Value is what people perceive it to be, nothing lessnothing more.
2. Does the Prototype provide value that exceeds theirwildest expectations (for all the stake holders)?
3. Value is the word you speak to the customer whenyou lose a big order
4. Help you offer the customer when he is stuck
5. Pat on the back of a new employee, doing a good job
6. A Simple Thank you to your Banker for hisconsideration
7. Infosys is great Example of a Value Provider
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Operated by People with lowest
Possible level of Skills
1. If your model depends on highly skilled people,it is going to be impossible to replicate
2. You do not need brilliant attorneys, but verybest system through which to leverage results
3. Provide results Systematically rather thanPersonally, System dependent rather thanPerson dependent
4. System dependent not Expert dependent5. Great businesses are built not by Extraordinary
people but by ordinary people doingExtraordinary things
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Lowest Possible Skills
6. People are important. They bring life to System7. Entrepreneur's job is to develop those tools and
teach the people how to use them
8. If the Entrepreneurs gets outstanding people, it
makes his job easier. Management by Abdication9. Results then depend on their mood
10.With ordinary people, you will have to find ways
to make it extraordinary11.You will be forced to do the work of business
development
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The Model will stand out as a place of
Implacable Order
1. The whole world is in a chaos War, Famine,
Inflation, Crime, Violence, Corruption
2. People want life Structure, Point of Reference
in this disorderly world
3. Structures provide the fixed points of
reference in this otherwise disorderly world
4. Softcell Inside Account Manager, Large
Account Manager, Technical Team
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Alvin Toffler in his book ThirdWave writes,
Most people surveying the world around them
only see chaos. They suffer a sense of
personal powerlessness & pointlessness.Individuals need life structures. The absence
of structure breads breakdowns. Structures
provides the much needed fixed points ofreference.
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All the rules will be Documented
1. This is how we do it here
2. Without documentation all routinzed work
turns into exceptions
3. There is a logic to the work that every onehas to follow
4. Operations manual e.g. Call center, Microsoft
Service Centre
5. Manual for operating a Car
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Uniform Predictability Service to the
Customer
1. Hair Dresser who gave a delightful experienceand took it away
2. Unlike the Burnt Child, customer has a choice
3. Consistency1. Maruti Service Centre
2. Airtel Service
3. Jet Airways
4. Whatyou do with your model is not nearly asimportant as doing what you do, in the sameway each and every time
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Provide uniform Color and Shape
1. Different consumer groups responddifferently by specific Color & Shape
2. Color Code needs to be scientifically
designed e.g. Dress
3. Logo on your Invoices, Visiting cards, Letter
heads, Vehicles, Advertisements
4. Facility Code Flooring, Sealing, Walls,Furniture e.g. Titan Shops, HDFC Bank, CCD.
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Work on your Business rather then in
IT ?
1. How do we Provide Value to everyone?
2. How can I get business to work without me?
3. How can I Systematize my business so that5000thunit runs as smoothly as my 1stone?
4. How can I own/develop my business and still
be free of it?
5. How can I spend my time doing what I love to
do rather than what I have to do?