Growing Your Business Like an Onion—One Layer at a Time

I religiously read Nick Powills’ columns, and once in a while he is relating a chief executive officer to a chief development officer discussion: “How come we do not have more sold or open units?”

Every brand has had these internal discussions. When I meet colleagues, peers or vendors, after the initial hand shake, the first question is inevitably “how many units do you have?” That’s because quantity matters.

In unit count, one can classify chains with a handful of different categories: the “less than ten” franchises (which are still in proof of concept); the “less than 50” franchises (which is the case for nearly 90 percent of franchisors; the “100+” franchises (this is where you start getting noticed); the “500+” franchises (this is where things really start to happen); and the “1000+” franchises (we have arrived).

Onion growth theory

As much as the CEO can push on one topic, it actually comes down to hundreds of interrelated parameters that will determine whether your company’s growth will move on to the next level. In fact, it can be compared to a full onion that has grown concentrically, one layer at a time.

I am a car guy, so I often use car analogies. What happens if one of the wheels of your car is unbalanced? It vibrates. What happens with vibrations? Gradually, they destroy their environment.

An onion growing one layer at a time will be balanced. The unbalance of your onion will limit its growth. So, next time you are asked: how can we add 30 percent more units by yesterday, think about all the internal topics that must be covered.

1-3-10 theory and scaling

In addition to the onion theory, I like to also use the 1-3-10 theory. Each time you triple the size or your company, it becomes a new company. It is true with people, process, quality, products, finance, operation, real estate, culture, etc.

What gets you from one to three units, will not get you from three to ten. Unlike the onion that's growing one layer at a time with the same chemical strategy, in business, you need to change strategy for the outer layers.

Needless to say, the ten to thirty will need another dramatic change. It is not easy, but if you stay focused on the course, you will get there. As a board member told me recently, you just need to “have it, get it, want it.”

And what about you? Do you “have it, get it, want it?”