January 28, 2019
Most businesses fail. That’s a negative way to start talking to budding entrepreneurs; however, that has been a fact in American business. Reasons for these failures include lack of duplication, lack of a proven method, lack of a mentor, lack of a recipe, lack of a plan, lack of capital, lack of a market, lack of a goal, and lack of an overall system!
There are also a large number of businesses that don’t fail, and some great examples of those are Krispy Kreme, McDonald’s, Subway, and Domino’s.
A lot of people say it began when Ray Kroc started McDonald’s because he understood how to create something so simple that anybody could operate it and succeed. I love when you walk into a McDonald’s and place your order; and then the employee asks if you would like to “super size” that? It’s like they have signs up everywhere blinking that everybody has to say the same thing. Their directions are simple, and they are clear.
Kroc was a high school dropout-turned-businessman, who took over the small-scale McDonald’s Corporation franchise in 1954 and built it into the most successful fast-food chain in the world. He created a fortune during his lifetime, ended up owning Major League Baseball’s San Diego Padres, and was named one of Time magazine’s Most Important People of the Century. Kroc was a Prince Castle multi-mixer (milkshake) machine salesman early in his career and sold eight units to the McDonald brothers for some of their restaurants. He eventually bought the McDonald brothers’ restaurants and pushed to open more stores across the United States. He maintained the “Speedee Service System” assembly line for hamburger production that the McDonald brothers implemented in 1948. He standardized operations in an effort to make sure that whether you were in New York, Dallas or Chicago, every single “Big Mac” burger would taste the same with “two all-beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame-seed bun.” He set strict rules for franchises on how the food would be made, the portion sizes, the cooking methods and times, and the packaging of food. Kroc rejected cost-cutting measures like using soybean hamburger patties. His rules also applied to customer service standards, which mandated that money be refunded for orders not filled within five minutes. Kroc took the McDonald brothers’ system, tweaked it in spots, and made it an even more efficient system, a system that was so successful it allowed him to live – and enjoy – an amazing life.
In an effort to raise money for college, Fred DeLuca, then 17 years old, borrowed $1,000 from a family friend – Peter Buck – to start his first sandwich shop in August of 1965. Since then, a little store we call Subway has popped up all over the world and consistently ranks among Entrepreneur magazine’s Franchise 500 rankings. At the end of 2010, Subway had surpassed McDonald’s with 33,749 restaurants worldwide. That number has since climbed to right at 35,000 stores in 98 countries and territories. That’s a lot of $5 foot-long subs!
Do you think DeLuca and Buck, who has a Ph.D., thought their outfit would grow to those levels when they started? Probably not, but they did keep trying to grow, and eventually had multiple stores across the United States. They were too busy working on getting bigger and better to worry about where they would be in 2011. They were smart enough to keep working because they understood that “if you work it, it will work!” That’s the mindset we want our people to have every day.
In 1933, Krispy Kreme’s founder Vernon Rudolph purchased a doughnut shop in Kentucky along with a “secret” recipe for yeast-raised doughnuts. After selling the doughnuts locally for a while, Rudolph moved operations to Nashville, Tennessee in order to meet customer demand. He sold his interest in that company in 1937 and moved to Winston-Salem, North Carolina, where Krispy Kreme was born. Rudolph started selling to grocery stores and eventually sold directly to customers. Krispy Kreme was growing, and by the 1960s it was known throughout the southeast. Now, it’s known in places all over the world and is publicly traded on the New York Stock Exchange under the symbol KKD. Mr. Rudolph probably never imagined how big his little local doughnut shop would be one day. He had a system, and it worked out well for him! “Hot Now” neon signs are recognized throughout the doughnut lover’s world and you want to get ‘em while they’re hot.
On June 10th of 1960, brothers Tom and James Monaghan borrowed $500 and made a $75 down payment to take over Dominick’s Pizza, a small pizzeria in Michigan. Dominick’s quickly became Domino’s, and Tom bought out his brother by giving him a second-hand car. By the late 1970s, there were more than 200 Domino’s franchises in the United States. Domino’s Pizza then went international in 1983.
What is amazing is that for the longest time Domino’s was resistant to any changes. Tom Monaghan was stubborn when it came to his little pizza shop. The menu, for instance, was simple and streamlined. Customers had the choice of one type of crust, which was named the regular pizza, so you could order the “regular” or the “regular.” You did have a choice of a small or large pizza. Domino’s offered pizza and Coke for the longest time and it worked, but Pizza Hut, Papa John’s, and Little Caesars forced Domino’s to change things up.
After being in business for more than 30 years, Domino’s unveiled its “Deep Pan” pizza in 1989. This was a reaction to all other competitors rolling out new, exciting pizzas. The move solidified the company, and Domino’s opened its 5,000th store later that year.
In 1992, Domino’s first non-pizza item, the bread stick, was introduced. A little reluctant to offer a “non-pizza” item, Domino’s offered a pizza dipping sauce for the bread sticks – a very popular move that increased sales.
In 1994, Domino’s went to the barn yard and introduced chicken wings to its menu. By 1996, the company had reached global levels – even adding stores in Egypt and other locations – and sales flirted with the $3 billion mark.
While they did resist change for about 40 years, Domino’s is still viewed as an industry innovator. The belt-driven pizza oven was a Domino’s invention; they were one of the first to use corrugated cardboard delivery boxes to help retain the heat of a pizza pie until it reached your home, and they developed the “Heat Wave,” a portable electrical bag system drivers used to keep your pizza warm during delivery.
The changes Domino’s made were for two reasons: to help the company become better and to keep customers happy and coming back. Domino’s did this by becoming more efficient and by producing a higher quality product.
Tom Monaghan retired in 1998 and sold 93 percent of Domino’s for $1 billion dollars. Not a million, but a BILLION dollars. Not a bad return on his $500 investment.
A 2009 consumer taste preference survey conducted by Brand Keys delivered news that Domino’s did not want to hear. Domino’s tied for dead last with Chuck E. Cheese’s for the worst-tasting pizza. The company didn’t waste any time. It began a campaign to improve quality, and the chefs were shown trying to improve the product in television commercials. Within a year, a new pizza was introduced, Domino’s celebrated its 50th year in business (2010), and J. Patrick Doyle was named as its new CEO. The improvements resulted in a 14.3 percent boost in quarterly profits, one of the biggest quarterly jumps by a major fast-food chain ever recorded.
By changing its pizza recipe “from the crust up,” Domino’s reconnected with customers it had lost over the years to places like Pizza Hut, Papa John’s, and Little Caesar’s. Domino’s new recipe worked because they listened to the customer and made improvements where it made sense to do so.
If you know something is wrong and you don’t fix it, then you are going to continue to have problems. As Albert Einstein said, “insanity is doing the same thing, over and over, and expecting different results.” You can’t be afraid to make changes, especially when you know they are needed.
Kroc, Monaghan, DeLuca, and Rudolph were all pioneers in business who proved the value of a duplicating system. A major purpose of this book is to teach the NAA success system that will allow you to build a duplicating business with no limits on what you can accomplish. Follow in the footsteps of these great businessmen, follow the NAA system, and stay committed to your goals … you can’t fail!
In a traditional business you have to learn “stuff,” and think ahead to be creative. Franchises that thrive typically use the phrase, “duplicate, don’t innovate.” It’s not that they don’t want you to have your own personality, and be your own person, but they also want you to be successful and they have clear-cut instructions in place for you to follow. It’s a system of duplication that has worked repeatedly. It has been proven that people who follow this system are successful, and it can work for you too.
It’s like a factory. I worked at Bojangles’, one of the most successful fast-food chains. They showed me how to cut the biscuit, how to take a piece of ham, put it between the bread, fold the paper over the top and slide it over the little bar for another person to take. They even told me at what temperature to keep the warming light. Everything was basically simple. I used to laugh so hard because I said anybody can do this, but apparently you have to show up to do it, and you have to work to do it. Those are two things that most people can do. Having a system that is duplicatable keeps it simple. You just have to be willing to work (and many people are not), be willing to learn, and be willing to copy – something I knew I could do with time and energy.
When a person first gets started with National Agents Alliance (The Alliance), they want to know what to do. I want to refer to the old 1967 Oscar-winning movie Cool Hand Luke, which was directed by Stuart Rosenberg. We love to joke about how the sheriff tells Luke to “get his mind right.”
When people join our organization, they come from incredibly different backgrounds. Some people have money in the bank, some are ridiculously broke, some are college educated, some have a GED, some have business backgrounds, and some have no business knowledge at all. We have young adults – as young as 18 or 19 – and we have older people, some in their 60s and 70s that join us as well. There is much to learn – you, therefore, need to get your “mind right.” Anytime you start a business you start thinking about things like do I need office space? Do I need to hire and train employees? Do I pay them on a W-2? What about a 1099 form? How do I learn the tricks of the trade? How do I track my inventory? How do I keep up with my bills? How do I do all these things? What do I do next?
Let me clearly state this: we cannot produce a miracle overnight. You are going to have to put in some energy, some time, and a lot of effort to become successful with our organization. We have been quoted as saying that “a person who thinks they can do this like we have done it, who thinks they can build large businesses, who thinks they can produce results like we have produced without time, effort, and energy is really arrogant.”
We are offended that someone could be so arrogant to think they can build a multi-million dollar business without effort. What I would ask you to do is to give yourself time and some runway to clear the trees like when a plane takes off. The plane has to have enough room to gather momentum, expend some fuel, and soar high enough to clear the trees. Please give yourself some time and plan to work hard. Understand this: you were brought into this business by somebody that wants to expand their business. They experience success when you are having success. Therefore, you need to understand that you are in business for yourself, but you are not by yourself. We have a system set up that gives you guidance, planning, and step-by-step instruction. We have mentors and growing managers that we require to provide the training for you. We have events such as National Convention, Alliance Training Certification, Family Reunion and other various events around the country that we have carefully built, nurtured, and designed to give you all the support you need. Our HotSpot meetings (SEE www.NAAHotSpots.com for more information) provide incredible teaching tools and specific training designed for our team.
However, you will have to use these tools and the system in order for them to become a part of who you are. We say that it takes YOUR WORK to make the DREAM WORK. We ask this: would you rather enjoy the pain of discipline or endure the pain of regret? The pain of regret is like Hell, but the pain of discipline is just a temporary burn.
Yes, if you have a full-time job and this is a second job, career, or business, it does require some adjustments, extra time, and energy to learn our business. In the Bible, Galatians 6:9 reads, “And let us not grow weary of doing good; for in due season we will reap, if we do not give up.”
If you don’t give up, and you don’t let the roadblocks stop you, you will succeed.
Somebody could laugh at you for trying to actually do something different in your life and become a better person. Your spouse could have a heavy load and this just adds to it. Your children may be looking at you funny because of what you are trying to do. These are emotional issues that you have to deal with and you are going to have to “get your mind right, and I mean right,” like the sheriff tells Luke when he twice catches him trying to get out of jail and shackles him with a set of chains each time. The sheriff warns Luke there won’t be a third time because he’s going to make sure Luke “gets his mind right.”
Poor Luke, he never really learned, did he?
How do we stay focused? How do we make it? It’s inch by inch. It’s step by step. With our system, each inch and each step counts toward the ultimate goal. You must keep that in mind when you start the journey.
As you build your own team, you have to learn to trust your coach and your mentor. We all have to work together because your success at The Alliance is dependent on team success. There has to be a trust with the leaders of the organization that is developed as we go. Now to be clear, the leaders must live up to this trust. They must respect other parts of the organization and other people in the organization. There is a book written by Stephen Covey Jr. called The Speed of Trust. As we’ve hired people from advertisements, newspapers, and Internet advertising, we’ve noticed that it takes longer to build trust with them as opposed to hiring a friend’s friend through networking. If we can hire a person that trusts us from the start, then we can develop trust with them faster and that relates directly to Covey’s book. In his book, he explains that trusts equals confidence while distrust equates to suspicion.
My friend, Dave Anderson, who wrote How to Build Your Business by the Book, also says it is better to hire from referrals.
In general, coaches of any team typically talk to the team members in regards to trust. Trust is an important ingredient for effective communication on a team. Trust among team members encourages the team to work together for a common goal. If trust is betrayed within the team, often times the cohesiveness of the team is lost.
Trust is a characteristic that is earned over time and is important in securing relationships.
“People don’t listen to you speak; they watch your feet.” – Anonymous
Covey’s book dedicates an entire section focused on trust in relationships. “The truth is that in every relationship – personal and professional – what you do has far greater impact than anything you say,” Covey wrote. More often than not, your actions will always speak louder than anything you can say, even if you are the greatest salesman in the world. It’s great to say you are going to do something, but the longer you wait to actually do the activity, the less weight your words carry.
It’s clear that, if you only talk and never deliver, people will distance themselves from your rhetoric. Your words, coupled with a lack of action, can destroy relationships that took years to grow. If you always deliver then you have nothing to worry about. If you deliver consistently, the value of your words will become more valuable and your reputation will remain pure. That’s where the trust part comes into play. When this happens, you will be able to ask people to do things and they will be willing to do them because of who you are. They trust you and you can get them to move. The art of getting people to “move” is a powerful tool to have in your arsenal when you are leading a team. People want to trust you, so don’t give them any reason not to. This is important in new acquaintances that you recruit to join your team. It’s going to be easier for people to trust you if you’ve never given them reasons not to.
Dave Anderson writes about the “Dirty Dozen Causes of Management Failure” in How to Run Your Business by the Book and the fifth cause he lists is this: “Distrust from employees because of character issues like failing to admit mistakes.” Anderson knows breaking someone’s trust means they will have no commitment to you. It’s really difficult to convince a person to do more when they don’t trust you, and if they don’t trust you, it’s likely that they don’t like you either. You are going to be dealing with a person that just “does the minimum” once that trust is broken. Without building trust throughout your organization it will be very difficult to achieve your goals and reach your dreams.
“If your dream ain’t bigger than you, there’s a problem with your dream.” – NFL Hall of Famer Deion Sanders
If you have a tiny dream, a tiny problem can stop you. If you have a tiny goal, a tiny problem can stop you. If you have a BIG goal, a tiny problem won’t stop you. One of our recommendations is to get a “BHAG,” like Jim Collins talks about in his book, Good to Great.
If you want to know what a “BHAG” is ask Chris Gardner. He told our people in 2011 to read his book The Pursuit of Happyness if they wanted to know why he wore two watches. I recommend you read Good to Great to find out that “BHAG” is:
Big Hairy Audacious Goal
Collins coined this phrase in an effort to help employees focus on their goals and to work together in a positive manner. “A BHAG is a huge and daunting goal – like a big mountain to climb,” Collins writes. “It is clear, compelling and people ‘get it’ right away. A BHAG serves as a unifying focal point of effort, galvanizing people and creating a team spirit as people strive toward a finish line. Like the 1960s NASA moon mission, A BHAG captures the imagination and grabs people in the gut.”
It can be a simple goal like boosting sales or revenue growth 10 percent in six months. It’s about a company defining its vision and mission statement, then setting out to reach that goal. Maybe it’s a goal that your company sets for 10 to 30 years down the road.
Make your BHAG clear and decisive. It will serve as a unifying focal point of effort in your business. It will serve as a team booster. There is a visible end in sight that everybody knows about. Set a goal and let your people start shooting for it. In the chapter “Good to Great to Built to Last” of Good to Great, Collins writes about the difference between good BHAGs and bad BHAGs. A bad BHAG is based on chest-thumping and bravado, while a good BHAG is set with a clear understanding of what you can be, what you should be, and what is driving you in that direction. When you set a good BHAG, it’s a mix of core values and purpose.
Good-to-great companies build deeply-rooted, strong, committed management teams. If you can find a core group of people that are committed to helping your business go from good to great, then you are on track. It’s all about finding the RIGHT people.
Even with the right people, things are going to happen from time to time. That’s why setting your goals correctly and properly is very important. If you don’t set the bar high enough, then you won’t achieve big goals. Set your goal high enough that even if you come up just short, you are still in a great position.
If you want to create an extra $5,000 a month we suggest that you shoot for $20,000. We know that problems will come up from time to time, and interesting things that we call obstacles do come up. Some people believe overcoming those obstacles makes success that much sweeter. Problems are going to come up no matter what you are in pursuit of – it is life – it happens. For example, if you decided to go to the beach today, which might be three hours away depending on where you are, there will be problems you encounter along the way. There might be road construction, you could get a flat tire, or maybe you experience car trouble. Something could happen, but because you are so excited about where you are going, you are willing to deal with those road blocks in order to get to your desired destination. You are so pumped about being at the beach that you are willing to deal with whatever comes your way to get there. It’s worth it to you to go through all that to be on the sand and in the water.
We recommend “going for the gold,” reaching for the highest level possible, and making it happen. Believe how wonderful it’s going to be when you are on the beach, having conquered the obstacles you faced along your journey. Thinking that way will help get you through some of the little problems you are going to face in the beginning.
Build your duplicating business the right way by following The Alliance system. Set some audacious goals. Build strong relationships throughout your team by developing a deep level of trust and commitment. Lead from the front. Be the example to your team – learn from the successful leaders and, then, be that leader.