How to Deal With Slow-Growth Operators

How do you handle an owner/operator who doesn’t want to grow their business? The person who is either complacent and happy at a particular level, or fearful of growth and the challenges that may emerge? 

This is a vexing problem for a lot of franchisors because nobody wants a market only partially served. The crux of the problem is that as an owner/operator becomes more successful or as the business naturally matures there is a difficult transition to make, what I call the Core Competency versus Do-It-Yourself dilemma. The problem is, what leads to success in the early stages of business development—the hand’s on, day-to-day management—hinders growth as the company matures.  

Why is it so difficult for many owner/operators to take their business to the next level? And what can franchisors do to help in that transition? 

Although you may be tempted to say to the slow-growth owner/operators, “If you’re not growing your business you should think about selling,” this is unlikely to motivate most owners.  

A Complacent owner/operator will probably not budge much since they’re happy with what they’ve got and the way things are going. I recall a franchisee from my book, Franchising Dreams, who stated, “I’m happy making $40,000 a year. I don’t want a big complex business. I only want a couple of employees and to be able to go sailing whenever I want.”  

That research was conducted in the early 1990’s, so you can revise the $40,000 figure upward, but the principle remains: There are some owner/operators who use a franchise to fund their lifestyle and growing their business interferes with their “life.”  

Likewise, an owner/operator who is resistant to change will also be difficult to motivate. The fear of the unknown is enough to keep some owners operating at a “safe” level. So, what can you do to motivate the complacent or resistant owner/operator? 

• Increase marketing to drive more business to all the units
• Sell additional units or territories to cannibalize the low-growth owner/operator
• Create internal competition among owner/operators in the hopes that no one wants to be known as “last place” on any list. 

The telltale signs for both types of owner/operators are the same such as an inability to delegate, a fear of losing control, excessive focus on the details of the business, a short-sighted vision. That is, both types are likely to be do-it-yourselfers, focused on the internal workings of their unit. 

A lot of franchisors tell owners, “Work on your business not in it” as a way of motivating them to grow their business, but this is often met with limited success.

The key challenge with slow-growth owners is to shift their thinking from Do-It-Yourself to something else. And what would that “something else” be? I suggest that it should be core competencies—those two or three things that an owner excels at and that drives the business. 

Since every owner/operator will have different core competencies, it would be of great value to operators, their employees, and customers if franchisors could help them discover their core competencies.  

In essence, the transition that owners need to make is nothing short of a re-invention of who they are and who they have been, from operator to executive, from manager to leader. 

Are you training owner/operators to be leaders? If not, how can they be expected to fully devleop their business? How will they develop multiple units and create opportunities for themselves and their employees?

Before you dismiss an owner/operator as someone who is unwilling to grow make sure you have provided them with all the tools—especially the leadership tools—to grow their business. 

Peter Birkeland is author of "Franchising Dreams," a keynote speaker and management advisor. He is working on his next book, “Business Models that Create Wealth.” He can be reached at: peter@birkelandinstitute.com