Book Excerpt Article: How to Build a Franchise “Money Machine”

A recent article published on Entrepreneur.com and an excerpt from the book, The Multiplier Model, authored by iFranchise Group’s CEO, Mark Siebert, talks about how businesspeople, including franchisors and franchisees, can build Money Machines: those that provide a reasonable return on investment (ROI) to its owners, regardless of whether they even set foot in an individual operation.

In the excerpted article, Siebert discusses the small business success cycle. He also covers the core aspects of building an effective business model, from customers, to pricing, to products and services that can be offered at a profit. From this overview of the fundamentals of business — whom you serve, how you serve them, and how you make it financially sustainable — Siebert then stresses the importance of benchmarking, measuring, and monitoring a business’ KPIs.

Once developed and refined, ultimately, the goal for any business looking to grow is to ensure that it is not dependent on one specific individual to operate it. “Expansion requires you to create systems and then recruit and trust talented people to implement them,” notes the author.

Next, Siebert goes on to review how to take a business and turn it into a Money Machine, by applying the Multiplier Model. He states: “Use systems to create a duplicable Money Machine, measure its performance, and harvest the returns. Reinvest those returns in another Money Machine, continue to monitor performance, and harvest the returns. Reinvest in another Money Machine. Lather. Rinse. Repeat. That’s the Multiplier Model.”

He summarizes at the end of the excerpt by noting that, in business, one can’t predict everything. But by building a successful business model that works without the founder’s or owner’s direct involvement, duplicating that business model over time will multiply profits substantially. Thus, as the Money Machine grows, so does the business owner’s money.