Platt Perspective on Business and Technology

Planning for and building the right business model 101 – 37: goals and benchmarks and effective development and communication of them 17

Posted in startups, strategy and planning by Timothy Platt on May 3, 2018

This is my 37th posting to a series that addresses the issues of planning for and developing the right business model, and both for initial small business needs and for scalability and capacity to evolve from there (see Business Strategy and Operations – 3 and its Page 4 continuation, postings 499 and loosely following for Parts 1-36.) I also include this series in my Startups and Early Stage Businesses directory and its Page 2 continuation.

I have been discussing exit strategies in this series since its Part 33, that a new business might attempt when it has first started to be consistently profitable and with at least a modest consistent positive cash flow: when it as a result of that, enters its first real growth phase as an up and coming enterprise of promise. And I began discussing a specific scenario that fits that pattern in Part 36, that I repeat here as I set out to continue and complete addressing, at least for purposes of this series:

• A new venture, and certainly one that is built around a growth-oriented business model, might build its first bricks and mortar site, in effect as a prototype effort that it would refine with a goal of replication through, for example a franchise system. And there, licensing fees and ongoing franchise-sourced income going back to the home company, would provide funds that could be used for further capital development of the overall business among other supported purposes, to keep a longer-term fiscal systems focus here and remain consistent with the approach I have been discussing in recent installments to this series.

I presumed in Part 36, that pursuing this type of business development path was an initial strategically considered and prepared-for objective for a business that would attempt this development pattern, and from its beginning. And I assumed in that, that its founders and owners have prepared and built accordingly and from their earliest pre-launch planning stages on. Some franchise systems are in effect backed into, as emerging need and opportunity make them an attractive possibility. I assume here at least as a starting point, that franchise was a topic of discussion from before day one when the founders of this enterprise first began to dream and plan.

That noted by way of background to this installment, I add that I ended Part 37 by stating that I would consider the people now who would enter into this type of venture. And I begin that “… with the business founders and would-be overall owners of this type of at-least potential business empire. Then after offering at least a basic organizing discussion of who would most likely build a new venture with this possibility in mind, and successfully so, and after going on from there to consider franchisees and who would be good fits for taking that type of career opportunity on, I will reconsider the issues of business-wide consistency, as well as storefront-level flexibility, and both in prototyping new possibilities and in addressing local-to-store opportunities and challenges.”

• Who would seek to build a franchise system, and from scratch and as a starting business model objective?

One obvious approach to answering that would be to look to people who have had very positive experience working in this type of system. And look in particular for people with an entrepreneurial mind set and approach to life, who have become franchise holder participants themselves, and who have achieved real success at that. Look for people who have shown outlier levels of success developing and running single franchise outlets who dream bigger than that. And look to franchisees who have not stopped with simply managing some single franchise outlet, however successful, in such a system. Look for people who have managed, or who would wish to manage and effectively own, an at least small empire of outlets and franchise storefronts in such a system, and who have reached a point where the “effectively own” of that can no longer suffice.

I in fact raise a very important point there, that as a more general point of discussion reflects on what type of person would seek to found specific types of new businesses in general. And it is a point, as more generally stated, that connects both to my own career path and work life, and certainly as I have pursued entrepreneurial goals, and to the experience of others who I have worked with and learned from.

People who seek to build new businesses or who otherwise enter into what is fundamentally new for them professionally, almost always set out to build from a foundation of their own roots and experience, and in directions that connect with their ongoing drives and interests. True, many people make genuine career changes at least once over the course of their overall work lives. And this can mean going fairly far afield from their familiar backgrounds when doing so and for many of the at least overtly visible details of what they would do. But dramatic across the board change, and certainly as carried out for the sake of change per se, is more the exception than the rule here. And those who actively pursue that type of career transition are more likely to take their more divergent next step forward paths, because they see their old and familiar as no longer being viable for them. And even then, they generally seek to capture and retain what they consider to be their stronger transferable skills and experience when moving from old into new there.

That meshes with my own experience too, and certainly as a matter of general principle. And let me explain that with a brief digression from consideration of franchise systems and who would set out to build them per se, to consider career path transitions per se where franchise-related change would represent more specific case in point examples of that.

Drawing a few, selectively sketched out details from my own work life, where I have faced and carried out transitions, I spent a number of years working as a research scientist, and as a manager in that arena. And I went through some fairly significant career path transitions while doing this, and most certainly when leaving this type of work.

I actively carried out basic biomedical research at a key point in my earlier work life, gaining personal income and funding support for my research from privately sourced and government research grants: one of the commonest approaches there is for those who carry out research in academic settings. Then at a time when I was facing the end of my then-current round of grant support, I found myself facing a fundamental career path decision. Research grants are generally time-limited and my funding was coming up for renewal and with new competitive grant applications required and all that that entails. Should I simply try continuing along that path or should I try something new? And then a colleague of mine approached me with what he referred to as “an offer you can’t refuse” and I found that I couldn’t: I made a transition from working in a research lab to carrying out and supervising clinical research in a hospital setting, and teaching others how to do that type of work too. This meant shifting to an entirely new type of research for me in detail, while still working in a biomedical research context. But this also meant my moving into a position where my salary and benefits would arrive for me in regular, in-house employee form and not be time-limited constrained by my having to land that next funding grant.

And I built out all of the clinical research programs on a clinical service by clinical service basis at the hospital center in New York City that I was now working for, and built an overarching clinical research department out of that for them. Then for financial reasons that I have to admit, I saw coming as they arose, my department was downsized and I was downsized – and I made a more disruptive next step change, founding my first real consulting business and with a business organization and technology focus. My first real clients where drawn from the healthcare field, and came to me for assistance because they were in need of organizational guidance in setting up small businesses of their own (e.g. a medical oversight business that private ambulance services could hire, in order to meet their accreditation requirements for being allowed to respond to 911 emergency service request calls.) And I quickly branched out from there and with an information technology focus and a more general business development one as well. I came to work in and with multiple industries and businesses in them, new and established.

Why do I cite this here? First, my own work life example is my own and I know it and its details. Second, I have made both minor transitional and disruptively significant transitional changes over the years, and I have seen what was ostensibly some single same career stage evolve and morph over time, and in ways and to degrees that have cumulatively added up to being disruptive in nature. My consulting business evolution to include participation in as wide a range of business types as I have worked with, from a much more limited beginning, highlights that. The principles that I cite here, and from my own experience might not be grounded in franchise systems experience – except insofar as I have business consulted with a couple of large corporations that have franchise systems within them. But these basic career step patterns apply to those who become involved in, or who end up building franchise systems too. They reach out to new while seeking to hold onto and build from transferable sources of value and strength from their own pasts. And evolutionary change with its cumulative impact enters into that for them too.

Most everyone who I have worked with, or know for their professional career paths, have built their next career steps from as much of a foundation of what they have experience in already, as would be realistically possible and beneficial for them: myself included. People who strike out with an intent to build franchise systems, and scalable enterprises that can be built around proof-of-principle prototype storefronts, build from what for them is their familiar too – and whether that means building a franchise system around a business type that they know and are comfortable with, or from comfort zone familiarity with being a franchisee per se or both. And the same applies, of course, for those to start out thinking “single location” and then build out from there to assemble what becomes a franchise system business too.

Now, who would seek to be a franchisee in such a growing business empire? I will turn to that question in my next installment to this series, and will continue on from there as noted above with discussion of… “the issues of business-wide consistency, as well as storefront-level flexibility, and both in prototyping new possibilities and in addressing local-to-store opportunities and challenges.” In anticipation of that line of discussion to come, I will approach these issues from the perspective of who would do this and why.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 4, and also at Page 1, Page 2 and Page 3 of that directory. And you can find this and related material at my Startups and Early Stage Businesses directory too and at its Page 2 continuation.

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