When Should You Franchise Your Business?

 

One of the most successful methods of expanding your business is through franchising it.

Franchises are responsible for investments in new locations. These investments encourage you to perform well and help you grow your overall business. Several market forces make franchising a business an enticing prospect in 2019. And while all businesses are not capable of franchising, many industries would benefit from this exciting form of growth.

However, you have to be honest with yourself about what you are trying to accomplish. Before beginning to expand your business, here’s what you need to know.

Study the data

The first step to understanding whether franchising your business is the right step for you is to spend some quality time digging into your data.

See how your sales are going. If your sales are trending down, it may not be a good time to expand your business. Franchising does not turn around your sales. It may be detrimental to your business if you think about investing in a new location without settling a successful business first.

The best time to go through franchising is when you have positive outcomes, and the sales are trending up. In short, the increase in demand for your brand is the ideal time to open up new franchises. Once you have created a name in your field, you are ready to franchise. You need to have a strong system, and all processes should be in place as opening a new franchise means replicating the success of your initial business venture.

According to removalists Snappy Removals, “diving into your figures is key if you want to think about expanding. It’s not enough to know your revenue and expenses. By studying your net profit, cash flow and break-even points you’ll be best placed to expand your business with confidence.”

Learn to delegate

If you are a person more involved in the day to day activities of your business, franchising is not for you.

When expanding your business, you should prepare yourself for a role where you are overseeing operations and management training in a way that would benefit all of your franchises. This includes everything from greeting the customers to the ethics of your brand should be based on your vision.

Delegating is key to any successful business according to the team at Smart and Fast Electrical who say “successful delegation comes from clear communication. Be upfront with your expectations, timeline and deliverables. This will ensure nothing gets lost in communication. As a bonus tip, get everything in writing to ensure accuracy and efficiency.”

Before starting a new franchise ask yourself as a business owner whether you have the energy and time to commit to a management role. As a business owner, you should understand that it is not a race to expand your business. You should evaluate every aspect before you focus on scaling your business up. You should be prepared not just to invest money but time as well to produce long term results.

Look For Investors

Once you believe that your business is at a capacity to successfully franchise then it’s time to secure funding. While you can do this yourself if you have the resources, opening up a new location may require a short term loan to facilitate the necessary cash flow.

According to the short term finance experts at Maxiron Capital, “securing funds to ensure adequate working capital is often overlooked by new franchisees. While original stores can have an established audience, penetrating a new market means growing an entirely new audience which can take time, making short term finance vital.”

Even if your business is doing well, you don’t necessarily have to franchise it.

However, exploring a new franchise is one of the best ways to take advantage of the market opportunities to expand your business.

You should think about the time, money, people, and risk that you would be investing in franchising. But when you’ve followed these steps you’ll be giving your businesses every chance of success in the future.

So, what steps are you taking today to make your franchise a success tomorrow?