In this episode, Matt and Rick discuss how to set the right entrepreneur expectations vs the reality of business ownership. Whether you are an owner who wants to work in the business every day or as a semi-absentee owner, you need to know what to expect to run a successful business.
With our franchising business gathering pace and lots of people from different backgrounds coming in, we thought we could set out the expectations that an entrepreneur should have when getting into business. Alloy provides a lot of coaching for new entrepreneurs. Many have never owned a business and don’t know what to expect.
There is no better person to do this than Rick, having been in entrepreneurship for over 30 years. Rick admits he didn’t have the right lens for his fitness business initially. He was at the right place at the right time. It took a hiccup to realize that he needed systems in place and working on the business. This was the birth of the licensing and franchising business.
Rick discusses how he had a distinct advantage growing up because his father was a consummate entrepreneur. He saw him leaving a company to open his own company. His father hired people to lead the team and Rick remembers the struggles that came with growing a business and having to cut back on expenses in the beginning. He watched the risk his father took and the way he handled it. Rick thought having this knowledge gave him a leg-up on expectations, but in reality, it didn’t prepare him for his journey. About six years into the business, we had a massive hiccup, and it almost sank our business. Now, in hindsight, it became the impetus for what became licensing and now the Alloy Franchising model. While it was a blessing in disguise, he realized he wasn’t doing the things that an entrepreneur needed to do.
Rick’s biggest entrepreneur lessons he learned were that he wasn’t I wasn’t leading the team correctly, wasn’t holding them accountable to do the things that needed to be done, and didn’t have any systems in place. While he was in the business physically and as a trainer, he was basically absent as a leader and from business. That was a big mistake. He was looking through the wrong lense thinking he had everything figured out and the business was running itself.
When you wake up and realize you’re not as smart as you thought. You either quit or pull up your bootstraps and figure out how to be a better leader and business owner. It has taken many years to learn the lessons which benefit the Alloy franchisees now. Business metrics need to be set and met.
✅ Set Business Metrics and Key Performance Indicators (KPI’s)
✅ Operate As A High-Level Coach In The Business
✅ Hire The Right Person For The Right Position
✅ Hire Slow And Fire Fast
✅ Hold The Team Accountable.
✅ There Is No Absentee Owner – Be In The Business
If you’re hiring a manager/operator and you want to be a semi-absentee owner, the key is you better hire someone who has some experience that’s done it before. Hiring a director/operator for your club is a critical position. You should hire someone who’s done that before and compensate them for their experience. One of the initial functions of the operator is pre-sales. You will need somebody who’s organized and has run a successful pre-sale before. Make sure they show up on time for appointments and interviews. Their personal attributes will manifest itself in your business, so this person needs to be organized, caring, competitive, and goal-oriented.
Now, if you are hiring a part-time coach, they may not have experience as a trainer, but it is easier to find someone that is teachable, with good energy, and has the right attitude. You can teach them the workouts. While you can teach people how to train and coach customers, it is harder to teach people how to operate a business.
Slow to hire and quick to fire. One of the biggest mistakes was holding onto the wrong people for too long. We have a very comprehensive training program. If you provide every tool and opportunity to meet the expectations and metrics for the position, then if you still can’t meet the metrics, or miss appointments,they have to go.
As a semi-absentee owner, you need to pay attention to the business.At a minimum, log into the system and view your business dashboard. The Alloy dashboard software provides the ability to see the pipelines of leads and sales and the actionable steps to move from one pipeline to the other. You can see if the functions are being executed. Keep the team accountable to actual outcomes that you want.
There is also a fine line between coaching your team and micromanaging your team. If you think you’ve got the right person in the roles, looking at areas they might struggle gives you the opportunity to lean in and coach them. So I look at that level of engagement not as micromanaging, but engagement that is more caring about that person and teaching moments rather than putting my thumb on them. Nobody wants that and you don’t want to manage that way. You should hire good people and pay attention to the positive and negative outcomes. That’s your opportunity to help that person.
When we coach franchisees, we have check-in calls with the owners. We can identify the positive things and the red flags happening in the business because we have experience with it. As the owner, you’ve got to know the key metrics in your business, coach your team to achieve the metrics and hold them accountable. That’s the level of engagement that is expected, even if you never step foot in your facility.
When Alloy opened a new facility with Anthony, we had our KPIs in place, and Anthony knew the metrics and expectations. Now, we didn’t have to micromanage him. I’ve literally only been in that facility like three times in my entire life. From a high level, we could look at the dashboards. We could ask questions about what was happening or discuss trends. We could see when sales are fantastic, or talk about retention being off by a percent this month and drill down to help guide Anthony. He appreciated the fact that I was even paying attention to what he was doing over there. He mattered to us; the business mattered to us and what the business did for that community mattered to us. That’s the level of engagement that you have to have if you’re going to be an entrepreneur.
If you’re coming out of a corporate job, and you’re considering entrepreneurship, early in the business is literally the time for “all hands on deck”. Whether it’s your attention, money, time, or actual labor. Depending on the structure of the business, you’re going to need to be there or pay attention to the details. You can’t set it and forget it. You are really going to be in for a rude awakening if you think that’s how small business works.
“I had the courage to live life on my terms, as opposed to how other people felt I should.”
In summary, there is no such thing as semi-absentee ownership: learn the business, learn the metrics, be a leader, and coach your team. You may not have to be in the business all the time, but at least have to pay attention to it and your employees will appreciate your business.
Listen in as Rick helps us set the right expectations that an entrepreneur and Alloy franchisees should have before entering the fitness business.
Podcast with: Rick Mayo and Matt Helland
- Having the right lenses on your business (04:12)
- How to respond to mistakes (07:17)
- Slow to hire, quick to fire (10:37)
- Level of engagement for an absentee owner (16:38)
- All hands on deck (19:53)
- Entrepreneurship is amazing but not easy (23:56)
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