Top 10 Tips For Business Success in 2011
The most successful businesses regularly review where they are heading and what they need to do to reach their goals.
From my experience working with franchise businesses, I’ve drafted the following tips to consider when planning to help your business
go from strength to strength this year and beyond.
1. Plan your success from day one - All successful businesses, no matter how big or small, need a good business plan. Yet
many Australian business owners do not have one. A business plan is essentially the blue print for prosperity and growth,
taking into account all the variables and external factors which affect your business to help owners make the best
long-term decisions. When setting your business goals, make them clear, measurable and time specific. Consider
current market conditions and who you are competing with for your customers’ attention. This is where speaking to a
local professional with an understanding of your business environment can really be beneficial.
2. Manage your cash flow - Cash flow is probably the single biggest challenge for franchise businesses. To be successful,
you need to balance the cash flowing in and out. Review your cashflow forecast with a best and worst case scenario and
work out whether you have reserve funds or need to borrow. If you need extra cash, ensure you discuss the timing of
repayments as well as the amount, to best match expected cashflow. Also consider the different types of finance available,
including loans, overdrafts and leasing.
3. Interest rate management - With interest rates forecast to rise further in 2011, consider an interest rate
management strategy such as refinancing or consolidating business loans, fixing interest rates on outstanding loans or
repaying debt to reduce your exposure. Your local professional will be able to advise you as to the suitability of these
strategies for your business.
4. Consider investment strategies to maximise surplus funds - While the cost to borrow may rise, so may the
returns on investment. If you have extra cash, ensure it is working for you by effectively offsetting it against debt
or putting it in a high interest account. These accounts can be either at-call, if you are not sure when you may need to
access your money, or better still locked away until known future payments or cashflow events occur.
5. Talk to your accountant - Manage your tax effectively and communicate regularly with your accountant about
the tax implications of the year to date. Don’t wait until June or you may limit your options.
6. Protect your assets – Take out adequate insurance cover. If something unexpected happens, your business and
your loved ones need to be able to be provided for. You can never plan for the unexpected and this will help you sleep
better at night.
7. Develop a succession strategy – Prepare for selling or passing the business onto future generations, or to manage
unexpected events. This may include diversifying your personal assets aside from the business. An effective
succession plan is critical to the long-term success and sustainability of any business. Some small and family-owned
businesses often experience a period of instability, stagnation or even fail after the retirement or sudden passing of a
business owner without transition or succession planning.
8. Make sure your assets are assets -Businesses often forget to regularly evaluate their assets to determine
whether they are getting the best deal to help prepare for challenging times ahead. Purchasing new assets or upgrading
old equipment can reduce your overall operating costs and increase productivity. It’s a short-term investment for greater
efficiency, competitive advantage and long-term return.
9. Consider your growth options - Determine what market growth opportunities are available to you. Consider your business’ internal
structure, life-stage, vision and the wider economic environment to determine which growth strategy best suits your organisation. Growth options for
business usually fall into one of three categories, including growing existing business, attracting new customers or maximising profit margins. Also take
into account any growth factors which are important for you to retain a level of control over. Additionally, by ensuring you have the right financing in place,
you will have the confidence to seize any opportunities for growth that might arise. Communicate regularly with your bank to ensure they are aware of potential
expansion plans, cashflow humps and changes in business direction. By doing this, appropriate financial solutions can be tailored to your needs to enable quick
action when opportunities arise.
10. Get by with a little help from your friends - Quality and professional advice is one of the most important ingredients for business success. Good
accountants, lawyers, business mentors and your specialist franchise bankers can provide customised services, tailored to your system’s needs. Building a
strong support network is essential for all franchises to help make the best and most informed business decisions. All business owners need to surround
themselves with advisors and business professionals whose primary business is their business and who understand the complexities of franchising. There are
plenty of professional services firms out there that want your business. Think about what you value in your business relationships and look around until you
find the right match.
Growing your franchise business is no easy task, but there are ways and means to maximise your success and ensure future prosperity. Hopefully these tips may help
your business not only minimise any threats but live a long life, and offer many happy returns.
Darryn McAuliffe is National Manager,
NAB Franchise Banking. He is
responsible for the NAB’s team of
accredited franchise bankers and for the
ongoing accreditation of franchise systems
NAB Franchise Specialist Bankers understand franchising and can offer you a flexible and competitive finance solution to help your business prosper.
Important notice: NAB has not taken into account your objectives, financial situation or needs and recommends that you consider whether any advice
in this article is appropriate for your circumstances.