“You own the business, managers run the salons!”
That’s one of the value propositions expressed in an ad for Great Clips franchise ownership in a business magazine. Doesn’t that sound like the ultimate passive income? A business that you own, but trained managers run it and you basically just oversee it and cash your checks?
Undoubtedly, it’s not quite that simple, but the idea is a good one and that’s why franchises work! Because franchises are a SYSTEM that is overseen, modified, and improved by a leader like YOU. You spend more time making sure the business does what it is supposed to rather than having to actually “do” so much in it.
While the promise of a business that just runs on its own, apart from you, basically, and then sends you a nice check without you having to do much at all may be a bit of a long shot, working to systematize your business so that it can be run by someone other than you is a good idea. By building a business that is dependent upon the systems you put in place, rather than YOU having to be in place, you build a business that can grow and expand more easily. You build a business that is replicable (or “scalable” if you prefer the $3 MBA buzzword). That way, the business reaches its full potential. You’ll also find that a highly systematized business has a higher sales price when you get ready to exit the business because a good system will help the new owners recoup their investment and realize a profit that much quicker.
Warren Buffett once said he invests in businesses a fool could run, because someday one will! You know that in the long run it’s going to be tough to find managers who are going to be as good as you, so why not build a system that accounts for that? Then you can get on with enjoying the life the business was meant to give you in the first place!
If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.” – Red Adair