10 Tips to help your Business Thrive
This article appears in the November/December 2013 issue of Business Franchise Australia & New Zealand
There’s more to running a franchise than sometimes meets the eye. Successful business owners spend their time focusing on running business better – on ways to make more sales, improve productivity and increase profit.
And that doesn’t always seem like it meshes with following the system, implementing the manual and other things that are so much part of franchising. But the reality is your success depends on your own initiative, not only following the operations manual. So where do you learn this? One of the best ways is to find out what the successful people do. It can be tricky (and time consuming) to see exactly what this is, but over the years we’ve identified ten things that will help you fast track your own success.
1 Have a plan
If you have no plan, you may be busy but you’re likely to end up disappointed by your results. Planning means working out where you want to get to, and how you’ll get there. It includes thinking about the opportunities and risks ahead, and how you’ll deal with them.
From a financial point of view, you need to know what sales are required so you can pay your business and personal bills, and put something into savings. From an operations perspective, it means regularly looking at each area of the business and identifying how to increase sales, improve productivity, develop your team, and be profitable.
2 Know the Numbers
Your financial results show the results of your activity and help identify areas that need attention. Keeping track of them will help you run a better business. There are two aspects to this: Planning and Monitoring.
Planning includes preparing a budget and cash flow forecast. Monitoring is reviewing the key numbers that show how you are doing compared to your target. What are the numbers to look at? Examples include sales, cost of goods sold, and net profit.
Also pay attention to operational numbers like number of inquiries, number of customers and average transaction value. Your franchisor should be able to identify the most helpful ones.
3 Manage Your Expenses
Cost control is important but managing expenses is not simply about cutting costs. It’s about getting good value from what you spend. The best place to start is with a ‘line-by-line review’ of the most recent Income Statement.
Challenge each expense item from A to Z. Ask, “How can we eliminate or reduce the expense, or get better value from what we are spending?” Don’t simply slash away at all costs - the idea is to ‘cut fat not muscle.’ Not all costs can or should be cut. In fact, you may need to increase some expenditure to help you succeed.
4 Manage Your Cash Flow
Your business needs cash in the bank to pay the bills, and cash coming in the future so you can keep doing so. Having good cash flow means you won’t be faced with cutting expenses in vital areas that are needed to support your business.
Forward planning is essential, and for this you need a cash flow forecast. It will help you see the pattern of cash flow throughout the year. You can then manage and improve it. When it comes to improving cash flow, consistent, profitable sales, and good stock and debtor management will help. Hopefully your franchisor has worked out the systems to help – be sure to ask!
5 Maximize Return on Investment
One of the shrewdest maxims of business is to maximize your return on investment. What is your investment? Anything you spend time or money on. The big ones are easy to find, they include staff wages, your physical location and equipment. Marketing expenditure is another.
In addition to these, there’s another investment you make on a daily basis: your own time. If you want better results, one of the most important areas to consider is where you spend your time. The question then becomes “How can we use these investments more effectively to make more sales, produce more with the same resources and generate more profits?”
6 Invigorate Local Marketing
Marketing isn’t just the job of the franchisor. Successful franchisees focus on their own efforts to promote and grow their business. The starting point is to make sure people know about your business. You must also answer the question: Why should they buy from you? Regularly invigorate your marketing with local activities and by promoting new products and services. Learn about and use a variety of marketing activities, including social media, collaboration with other businesses and networking. Look for improvements in areas such as of number of prospects, customers and sales. Regularly compare results with your goals and make adjustments where needed.
7 Talk to Your Customers
If it weren’t for customers we wouldn’t have a business. Marketing will bring prospective customers to your business, but you’ve still got to make a sale. The best way to do this is to talk to your prospects and customers, and listen to what they tell you.
Find out what people want, let them know how you can help them - and most important, ask for the sale! Nothing happens in business until somebody makes a sale. That’s why top performers keep their own sales skills, and those of their staff updated, and sales targets front of mind.
8 Talk to Your Team
Think of a successful business and you’ll probably notice it has great staff. They are likely to be positive, enthusiastic and they make it easy to do business. Effective teamwork is a foundation for a productive and profitable business - so it’s important to make the most of your people. How do you do this?
Most people want to make a contribution and learn new things that help them progress. They want to be appreciated and valued. So, give them clear responsibilities, develop their skills, make their job interesting and give them the chance to progress.
9 Network Like Crazy
Networking with other people in business can help you build sales and increase customer loyalty. The key to networking is this: it’s not who you are talking to that is your likely customer, but its who they know! So relax, and just get to know them.
Learn something about their business and let them know what you do. Your network also opens up opportunities for joint promotions and local events. Make the most of the opportunity, and get involved! Apart from this, you can often pick up good
ideas from other business owners. Get to know what others do well, and see what you can apply in your business.
10 Take Action
Successful people tend to be very persistent. They don’t just collect ideas – they take action. They make the most of the good times, persevere through difficult times, and constantly seek to improve their business.
One of the best ways to stay ‘in action’ is to review your progress each month. Did you achieve your goals? If so, great! See what you can do to improve on that. If you didn’t, what happened? Was the goal achievable, did you do the actions you said you would and they didn’t work, or did you not do the actions? Look back at the past to learn from it, but don’t get caught up. Identify corrective actions, monitor results and adjust as required.
There you have ten things to think about as you start in your franchise. But it’s not just a question of reading it – you’ll need to put the tips into action. That’s why persistence is so important. Creating a successful franchise doesn’t happen overnight. But if you find ways to apply these tips in your own business, combined with the franchise system, you’ve taken huge steps towards achieving the success you dream of.
Peter Knight, FCPA, and Kate Groom of Smart Franchise are experts in business and financial mangement. They run workshops and seminars, and present keynote speeches that help people improve business performance.
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