Two Critical Business Principles Every Entrepreneur Should Learn from McDonald’s (Part 2)

Think Long Term

Ray Kroc changed the global landscape of business forever. In this blog we will continue our look into the principles of what Kroc did, and how he did it, in order to create a clear blueprint for our businesses and careers.

After much pleading Kroc convinced the McDonald brothers to let him franchise the McDonald’s system. What is so interesting is that Kroc’s dream was never to make hamburgers. Kroc’s dream was to create a successful business. When Kroc opened the first McDonald’s in Des Plaines, Illinois, he didn’t fall into the trap that most business owners fall into by working their fingers to the bone flipping burgers. Instead, Kroc’s focus was to “prove the system.”

Michael Gerber, author of The E-Myth, says it this way: “Ray Kroc created much more than a fantastically successful business, he created a model upon which an entire generation of entrepreneurs has built their fortunes.”

Kroc was a long-term thinker. Going in and immediately flipping burgers all day would have been a faster way to quicker cash. Kroc could have been putting quick cash into his pocket every day, by just working harder and flipping more burgers. Instead, he had a vision to prove a business model that he could sell over and over again.

Kroc thought long-term. He understood that once he made that business work, he could sell the business system as a franchise, again and again. Michael Gerber observes, “Ray Kroc began to look at his business as the product…. What Ray Kroc understood at McDonald’s was that the hamburger wasn’t his product, McDonald’s was.”

Are you a bridge builder or a barge worker?

Ray Kroc was a bridge builder not a barge worker. Let me explain.

In Michigan, the Mackinac bridge connects the upper and lower peninsulas. For decades barges or ferries would carry cars and people across the peninsula. Every day, as long as the barge workers showed up, they would be paid for their work. If they ever stopped showing up, the barge workers would not be paid. Every day, they would go back and forth, back and forth, across the peninsula “barge working.”

They would do what many of us do. We spend our entire lives going back and forth, back and forth to our employment. As long as we show up, we make money. If we ever stop, the money stops.

Eventually, some entrepreneurs thought there had to be a better way. They wanted to create a business system that would connect the two peninsulas. They wanted to build a bridge that would collect a $3 toll every time someone crossed the bridge. Well, that seemed like a pretty good idea. You would have thousands of cars, maybe even millions or tens of millions of cars crossing the bridge over time. You could do the work once, and be paid on it for years to come. What a good idea, right?  Here was the problem, the Mackinac bridge was going to take almost four years to build.

Can you imagine what the barge workers would say as they made money each day while the bridge builders built their bridge? I can imagine them yelling out, “Hey, Billy, you still working on that bridge?” “How much money you making?” “You still think you are going to get rich with this?” “How many tolls have you collected?” Every day the barge workers were making money as these entrepreneurs thought long-term about creating a business system.

Once the bridge was finally completed, this business system collected a $3 toll every time a car passed over the bridge. Think about the number of cars that have passed over that bridge as you have been reading this. Now, think about this, the Mackinac bridge was completed in 1957.

In 2015, alone, over 3.9 million cars passed over the Mackinac Bridge. In 2013, the Mackinac Bridge Authority reported generating over $21.2 million in operating revenue! This business system has been paying those early entrepreneurs residual income for work they did over 60 years ago.

Are you a bridge builder or a barge worker? Do you trade time and money every day of your life, back and forth, knowing that if you ever stop the barge the income will stop? Or, are you a bridge builder? Working consistently on creating a business system that will pay you without your own efforts? Are you willing to work for years to create something that can last decades? Are you a long-term thinker?