Managing Your Business the McDonald’s Way
Wouldn’t it be great if your small business:
- Worked without you. Only if your business can work without you, will it have any great capital or sale value?
- Delivered its product or service consistently time and time again to the customer.
- The employees did it the same way every time, the best way.
If we’re going to learn from a small successful businesses; the most successful small business in the world, McDonald’s. Even if you don’t like McDonald’s, there is no denying it is a hugely successful business.
- The owners don’t work IN the business flipping burgers.
- You know when you go you’re going to get the same consistent burger and service every time. They give the customers exactly what they are expecting, there is no disappointment hence customers return. Similarly, if you go to a printer and get a great print job done the first time but the next time there are a few mistakes, you’ll be hesitant to return again. How come it’s perfect one time and not the other time? That doesn’t happen at McDonald’s. What’s more, they manage to do it at thousands of their restaurants all over the world.
- The burgers are the best tasting burgers made the same way every single time. They’ve found their best formula and they use it consistently, only changing it when they find an even better formula. And that is true for every part of the McDonald’s experience from the food, to the greeting, to the cleanliness, to the kid packs, etc. Everything works and is done the same way until they find a better way to do it.
It doesn’t matter who does a task, they always follow a system, so that every single time the result is the same and the customer gets the same experience every time they go back.
When one person leaves and another joins, how come nothing changes?
Although McDonald’s is a seemingly low-quality product, it is an extremely high-quality business that customers value and have great loyalty to.
McDonald’s has the entrepreneurs with the vision to move the business forward, the managers who manage the units, and the technicians who work in the units and they all work together in harmony.
Of course, it’s because they have an organisational strategy, a management strategy, and a system for everything they do. It is the ultimate systematized business that runs just like clockwork.
Just because your business isn’t McDonald’s doesn’t mean you can’t learn from them. It is what is known as a Business Format Franchise. This is the type of franchise-operated throughout the world by many other businesses and it’s no surprise that franchises are far more likely to succeed than any other start-up business.
When a Mcdonald’s franchise is taken, the franchisee gets far more than a brand name. They get a whole way of doing things that work and not until they have learnt the way things are done, do they get the keys to the door.
Just because you are not going to franchise your business doesn’t mean you can’t learn from how they make everything inside the business consistently happen. If that happened just inside your one business unit, without you working in it, wouldn’t your business be a great place to go to work, or not work if you so choose?
When Ray Croc took the McDonald brothers burger business in 1954 and set about figuring out how he could make it work, he set about working on the business and not in the business. The business became the product to him, not the burgers and it was the business he worked on.
The key is to work ON, not IN the business
If you are a one-man business, not wanting to grow, this perhaps isn’t true to the same extent. Although certain things can still be learnt from it about ensuring you deliver consistency to your customers. A one-man operation may not really have a business; they have a job, possibly a well-paid one, with customers as their boss. This doesn’t mean there is anything wrong with the one-man operation. The world is reliant on many one-man operations, it’s just that some of these principles apply less to them.
For every other small business that wants to develop, you’ll only do so if you get to work on your business and stop working in it. As an extreme, you can imagine that you are going to make another 1000 just like it. What would you have to do to achieve this? You would have to completely systematize your business.
An analogy that can help with the understanding of working on, rather than in your business, is a game of monopoly. If you are the hat in the game, you are simply a piece in the game and you don’t make the decisions, you can’t influence the game at all. However, by being a player in the game and being able to see the whole board, you can start to put strategies into place that will have far more of an influence. You are now working on the game rather than being in it. It’s exactly the same for your business, you can have far more effect by working on it.
Before we get carried away, a word of warning. Some small businesses tried to systematise their business and got carried away with it and failed before they got going. Some people believe the E-Myth book on which the above is based sets a standard that most people cannot hope to meet. Common sense is the operative word and the E-Myth is a must-read book for every entrepreneur.
You have to operate and generate enough income to put food on the table, pay the mortgage, etc. This has to be the first priority. After that, look to work on the systems for your business that will:
- Give consistency to everyone – your customers, suppliers, and employees.
- People with the lowest possible skill level are operating it. This enables you to find staff when you need them at the lowest possible price. You don’t want systems that only high-quality people can operate, because when that person leaves, you will have trouble getting a replacement. Sure, you say McDonald’s is not like your business. So let’s take a far more complicated business such as a firm of solicitors. If a firm of solicitors was to employ only the brightest legal brains it would be extremely difficult to consistently offer their level of legal knowledge, as it becomes very difficult to find a replacement should they leave, be ill, etc. If they were to develop services anyone with an average brain could provide, the business would grow more.
- Enable you to eventually not work in the business at all.
Focus on the most critical things you do in your business and systematise them, your business will become far better.
So what you need is a systems dependant rather than a people dependant business. The systems run the business and the people run the systems. You can’t do without people, but the more you systematize, the less dependant you become on people.
How We Can Help You
At ACCOTAX -Norbury Chartered Accountants, For further advice and assistance in systematising your business please speak to us.