Scale and Volume: How To Add Value To Your Business.

McDonald's is a true scale business – firstly it is large (though this is not the most important factor), it is highly systemized and structured, its value lies in volume and its owners are not tied to the business day to day. Let’s look at some basic facts that highlight the scale aspect.

Firstly, size. 31,000 stores in 119 countries – that’s big! They serve about 47 million customers per day and have over 1.5 M staff internationally. Some of the more interesting details in terms of adding value to your business are that the average age of a McDonald's store manager is just 21 years old.

How does this work?

Because they have policy and procedure manuals for everything, they have a training program second to none and staff are constantly monitored and measured.

The P & P manual includes details on every aspect of store operation: E-Myth on steroids! If the thick shake machine is not working, there will be a page on how to fix it and if that doesn’t work a page on what signs to put up explaining the issue to customers.

Does your business have this level of systemization?

McDonald's has done this by necessity. They have a young inexperienced workforce, and they rotate staff often. As an added benefit, it adds incredible value. In terms of scale and adding value, these guys are the best.

As anyone who has ever eaten in a McDonald's store will know, they always ask you "Do you want fries with that?"

This question alone makes them $22M per day – an amazing number firstly.

Also amazing that they know that! McCafés (an Australian idea) are known to add up to 60% turnover to stores they are added to.

Drive-thrus when added nearly doubled the turnover of stores on main roads – simply another version of adding scale to an existing operation.

As a business owner no one expects you to have a drive-thru or employ 1.5 million people. But the lessons are obvious, if you have a scale business volume is the key – and not volume based on discounting, volume based on working out how you can ask “Do you want fries with that?”

And how does this apply to the typical Australian Mortgage Broking business you may be thinking?

Good question. We are entering, or i should say, have entered, the era of bigger is better. What i call the 'Super Broking Business' era. Settling $50M, $150M, $200M per month will not be uncommon; and these businesses will be the ones that command the highest prices in the market (not to mention soaking up much of the oppportunities and resources).

So having proven efficiency and scale in place will be a massive drawcard moving forward. Now's the time to get going with putting in place your scalable platform for growth as this will be a key component of accelerating value growth.

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ABOUT THE AUTHOR

Ash Playsted - Founder | Paladin Partners

Ash is both a dedicated STRATEGIST and MINDSET tactician who relentlessly pursues his 'higher calling'. Ash been has been building businesses personally plus continuously learning for more than 40 years, all of it deep inside the Mortgage and Finance industry. He's written thousands of loans, hired and mentored hundreds of brokers and business owners, started, built, and successfully exited, multiple award winning Mortgage businesses himself. When he's not immersed helping clients create massive value you can find Ash with his loving family, including his wife Kaz, two children, two dogs, two cats and three parrots! Ash believes in keeping physically and mentally fit and is constantly developing himself through exercise of body, mind and spirit.