Business Franchise Australia


Setting up shop – The Consultant’s perspective

So, you’ve made the big decision to buy into a franchised business and signed on the dotted line. What next? Your due diligence is done, you’ve considered the market potential, you’ve investigated the attitudes of other franchisees, obtained quality legal and accounting advice. There’s no doubt the best quality franchisors will provide significant support as you, literally, set up shop. But here’s a few things you need to consider to help ensure your business gets off to a great start, is managed well and you recoup your investment quickly.

Budget your cash-flow

Developing a budget when the business hasn’t even operated may sound a little daunting but is an essential part of starting any new business. When you were researching various franchise opportunities, you should have undertaken some serious financial analysis of each business (at least those in your short list). This should provide a reasonable starting point for understanding the cash-flow implications of the business. Sadly, many businesses struggle in the early days because they haven’t considered how they are going to fund losses that might occur in the early months of operation. You need to consider this critical issue and take a pessimistic view of the potential. Don’t fall into the trap of taking an overly optimistic view of the business’ potential.

Take the time to hire good people.

It’s surprising that many small business owners don’t pay enough attention to who will staff their businesses especially during the critical start-up period. The old adage ‘hire for attitude and train for skill’ is perhaps the most important consideration. You want people that will represent your brand and business well, develop relationships with customers and make them want to return because they get great service. This takes time and effort. Look for people with an attitude of customer service and test their work history thoroughly.

Process and procedures

If you’ve bought into a franchise system, you should have been provided a comprehensive operations manual. Read it! Don’t put it on a shelf and let it gather dust. Presumably, it contains some valuable information about how to operate your business and how to seek help from the franchisor. Ensure your employees read and understand the relevant sections of the manuals too – it will save time and angst in the longer run.


As a customer, there’s nothing worse than asking a sales assistant a question and receiving the response; “I don’t know, I’m new!” Does the customer care if the individual has been working in the store for one hour or one decade – absolutely not, they simply want an answer to their question. They don’t want to be kept waiting while a trainee fumbles around a point of sales system either. Make sure your people know where to find the various supplies they need to do their job properly. Train your people and, before you let them loose on customers, test they know what they are doing.


Contact suppliers and place orders for stock and supplies early. This will help ensure your new business is appropriately supplied when you open the doors. Retail businesses (especially food businesses) need to convey a sense of abundance and generosity. Scantily stacked shelves and poorly organised supplies can quickly communicate the wrong message – perhaps one that the business isn’t performing too well – and that’s a difficult position from which to recover. You need to set the impression of a solid business from the very first instant the doors open.

Let your customers know you’re open

Starting up a new business is not a case of ‘if you build it, they will come’, yet many new business owners simply open their doors and expect floods of customers the next instant. The reality is you will need to educate customers that you are open for business – even if you’ve bought into a well-established brand and network. Your opening promotion campaign should be aimed directly at your target audience, communicate your offer succinctly, and (in most cases) offer them some incentive to buy from you within a very short time frame.

Opening promotion campaigns often result in the ramp-up of a new business being substantially quicker than might otherwise be the case. This, in turn, has a significant effect on cash-flow in the critical early months of operation.

Measure results

Once you’ve started trading, compare results against your budget regularly. Are sales on track? Are costs within control? Knowing how to read the various reports your point of sales or accounting system can provide is essential. This will give you the ability to recognise deficiencies in the business quickly and take immediate action, rather than letting problems go unnoticed and potentially damaging the business in the long run.

Get good advisors

Every business owner, regardless of how simple their business may be, needs to surround themselves with quality advisors. Often outsiders bring new insights and thinking into the business. Join local business support groups to gather advice and knowledge. Ask other business owners whom you respect for their opinions. Just as importantly is the need to find and engage a good accountant – these people can be worth their weight in gold. But, what you need is a proactive accountant, not somebody who will produce your BAS statements and annual returns – that’s simply a case of telling you how the business performed! You want somebody who can help identify issues, point out areas for improvement and the like. Every accountant will tell you they are proactive, however, you need to test this out – don’t be shy about asking for references. Quality people will provide them. It is a great shame that many new business owners spend considerable time and effort investigating and evaluating a new business opportunity only to fall short in the practical issues we’ve discussed. Give your new business the best chance of succeeding by covering off these basics.

Good luck and best wishes for your success.

David leads the Melbourne consulting team at DC Strategy – specialist franchise strategists with a focus on the practical application of channel strategy and management as a key method of achieving sustainable business growth.

For more than 20 years, David Stafford has worked in key management roles and as a strategic advisor with leading organisations in Europe, Asia and North and South America covering a range of industries, sectors and businesses.

Contact David at:
Phone: 03 8615 7207