According to the Small Business Administration 85% of small businesses fail in the first five years. They fail for a variety of reasons but the biggest one by far in not having a clear plan to help the business succeed.

At the same time, these businesses are failing; almost 90% of all franchises are succeeding. How can there be such a wide gap between success and failure? In my experience, people start businesses because they have found something that they love to do and hope they can make money doing it. However, when real life steps in, only about 15 percent of these entrepreneurs make it past the first five years.

Is there a way to increase the success rate of start-up businesses? I believe there is. I believe that the lessons for any successful business lie in the fundamentals of a successful franchise.

Why Do Franchises Succeed?

Franchises succeed because they have learned all the mistakes. Chances are the average hamburger shop doesn’t weigh the ground beef that goes in each burger like McDonald’s does. Every franchise has every aspect of what it does down to a science. Franchise businesses know the floor space, inventory, profit margins and training techniques that are most profitable.

By the same token, the mom-and-pop store often runs on trial and error.

Imagine Mrs. Fields making her famous cookies in her own kitchen long before she became a franchisor. Do you think her cookies have gone through some sort of evolution process since those early days? Do you think the ingredients were refined, measured and re-measured to reduce costs without sacrificing flavor?

Even McDonald’s is not immune to failure. It has a trial-and-error system it pulls out from time to time. The Arch Deluxe and McLean Burger are just two failures that come to mind. When franchisors learn what doesn’t work, they stop to refine it or force it to work and move on to something that does work.

How Will This Work For You

Once you have a winning product or service, such as Mrs. Fields cookies, the next step is to develop that product or service to achieve maximum profitability without sacrificing the quality of the product or service.

You might think the best way to do this is trial and error. You would be wrong. The best way is to find a similar business or a business association that is successfully doing what you want to do and learn from it.

The Internet is a great place with listings of business just like yours. Call people around the country and get to know other owners of similar businesses. Research associations on the Internet and join the ones that reflect your goals.

Talk to experienced people. Pick the brains of those most experienced in your industry and help those that know less than you do.

Have you ever been uncomfortable in your job? Not sure what you were supposed to do? Employees that are comfortable and confident in their jobs do better and make fewer mistakes Take time to create an operation and training manual for your business. Your local Job Service can give you some free assistance with this.

Good Training Pays Off

Force yourself to take the time to train employees and be consistent with that training with each new employee. A sure recipe for business disaster is having inconsistent policies and procedures that confuse customers and decrease the bottom line. Franchises stress perfection and consistency, not just getting through the day.

Good Communication Pays Off

Open communication within your business is another key to success. It’s analyzing the cause of problems, not finger pointing about who is at fault that eliminates those problems and improves the bottom line.

Some Final Thoughts

Encourage your employees to question your decisions and suggest alternatives. You might be surprised at the things you are missing in your business.

Next time you are in a franchise, take the time to really look at your business. Examine the layout, the employees, the signage, and look for things that might be able to adapt to your business. You may not like a franchise yet, but tomorrow — who knows? It’s better to get ready now than wait till later.

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