Two Critical Business Principles Every Entrepreneur Should Learn from McDonald’s
What has made McDonald’s the highest-revenue fast-food franchise in the world? They did not invent hamburgers, French fries, or soda. They were not even the first car-hop fast-food restaurant, so what did they create that changed the landscape of business forever? A Duplicable system.
Let me ask you this, who is the founder of McDonalds? Was it Ronald McDonald? Uh, no! Was it Ray Kroc? Again, no. It was Dick and Mac McDonald.
1. Simplified idea + Duplicable System = Business Speed
Back in 1940, two brothers from New Hampshire, Richard James “Dick” McDonald and Maurice James “Mac” McDonald started a restaurant in San Bernardino, California, called “McDonald’s Bar-B-Q.”
In the early 1950s, they studied their last three years of sales numbers and found that 80% of their sales were coming from hamburgers and 20% of their sales were coming from BBQ. They decided to make some changes. I would have loved to have heard that sales pitch. Maybe it went something like this:
“Hey bro, I’ve got an idea. I know we are the most popular car hop in town, but this will really help us take off. Let’s close the BBQ. Let’s take our menu from twenty-five items to nine! Let’s sell only hamburgers, cheeseburgers, French fries, milk shakes and drinks. If a customer wants chicken, fish, or steak, we will sell them hamburger. Let’s change our entire business model from the car hop. Our customers can get out of their cars and walk in. We will call it, “self-serve”. Also, let’s spend a bunch of money designing and buying new grills with larger surfaces. Then let’s spend a bunch more money designing and buying a condiment dispenser that will put the exact amount of ketchup, mustard, onions and two pickles on each burger, so they will all taste exactly the same. What do you think?”
What people really thought was that they had lost their minds!! Instead, they had just put a plan in motion that would change the global landscape of the restaurant business forever.
Their new plan cut the price of their burgers from $0.30 to $0.15. They cut the time to get your food from 20 minutes to 30 seconds. They simplified their idea. They added a duplicable system and their business exploded. Over the next three years, from 1951 to 1954, they grew by 40%. They went from $200,000 to over $350,000 in sales per year.
In business, complexity kills speed. To create momentum, growth, and speed in your business, you must simplify your ideas and create a system that can produce predictable results regardless of the person using the system.
2. Good is the enemy of Great
In 1954, Ray Kroc, a 52-year-old man, with no college education, who sold a milk shake maker called the “multi mixer,” took an interest in the success of the McDonald brothers’ stores. Dick and Mac had purchased eight multi-mixers, and Ray wanted to see what kind of a restaurant could possibly need eight multi-mixers.
Ray went to San Bernardino and saw the incredibly efficient system at McDonald’s firsthand. He imagined hundreds of McDonald’s with eight multi-mixers at each restaurant. Ray asked the brothers if they had ever considered expanding their business. They weren’t interested. We are doing “good,” they said. We made $150,000 each last year, and $150,000 in 1954 was pretty good money, (about $400,000 a year today)!
And, therein lies one of the reasons why people fail to grow into their greatness, because Good is the enemy of great.
Bad is not the enemy of great. Good is the enemy of great.
The worst thing for ambition is comfort. When life gets bad enough, we change. We eat more food than we should because it tastes “good.” We waste our life away on the couch watching “good” TV shows. Finally, we go to the doctor. He walks in after our exam and says, “This doesn’t look good, I have bad news.” We say, “Doc, I will do anything!” We are willing to work as hard as we can to fix the problem. When life is “good,” the pain is small enough, and we get complacent.
Most of us are “good” with doing just “good!”
- Someone asks, “How is your job?” “Uh, its good.”
- How is your marriage? “It’s pretty good.”
- How is your business? “So far, so good.”
- How is your health? “I feel good.”
For many of us, our “good” has become the enemy to our becoming “great.” Our “good” has become the enemy to our unlocking the true potential that is within us. Most of us settle for “good” because we cannot envision how “great” great is.
You weren’t born with goodness in you, you were born with greatness within you. You are a child of God. You were endowed with the seeds of Greatness, and you were born to win. Your playing small doesn’t serve the world. Don’t let your “good” be the enemy to your great!