I believe there are three ways to grow a company. Each is valid and a fit for a different type of entrepreneur. Each has the potential to make a business buyable
. Let’s look at each approach in turn.
Build Your Business by Buying a Franchise
The first approach is the “franchise prototype way,” advocated by Michael Gerber in E-Myth. When you buy a franchise, you get a complete blueprint for building a certain type of branded company, like a UPS Store or a Subway sandwich shop. You don’t have to come up with any ideas on your own. In fact, the fewer ideas (temptations) you have to customize the system and the more rigidly you follow the recipe, the higher are your chances of success.
Trouble is, most entrepreneurs hate being micromanaged, even by a successful recipe. You embarked on running your own business to enjoy the freedom and the no-limit potential that comes with it. Following a recipe is boring. There has to be a better way, and you may feel sure you’ll come up with it.
Grow Your Company by Trial and Error
Since most don’t like franchises entrepreneurs often go with the second way of growing gheir company: the trial-and-error method. This is also a “proven system,” provided you don’t burn through all your cash reserves before breaking even. Unfortunately, research shows that it takes 15 years to break through to outstanding success. Gene Landrum in Entrepreneurial Genius gives two dozen examples, from Richard Branson to Michael Dell, Jeff Bezos, and Michael Dell. They all put in their 15 years, although some of them started as young as age 14, such as Branson with Student Magazine and Dell starting a stamp collection business in Middle School.
The trial-and-error method works, but it takes 15 plus years to break through for the best of us, and most entrepreneurs never make it with that method.
Use a Management Blueprint
Fortunately, there is a third way. I call it “using a Management Blueprint.” A Management Blueprint is a generic franchise system that you can implement in most companies irrespective of the industry. It is less rigid than a franchise model, allowing enough flexibility so entrepreneurs don’t feel straight-jacketed when they build their business.
Next time I will talk about Eight Management Concepts that are critical for you to apply to your business and which form the basis of all popular Management Blueprints today.