Working on your business: Franchisees are not alone!
As the owner of a franchise business you will experience your share of challenges. Irrespective of how long you have been a franchisee (one month or 10 years) you should invest time to work on your business.
By this I mean, look at the big picture, identify any threats and opportunities to your franchise and develop a detailed action plan. This plan will become a ‘living’ document to be regularly reviewed, analysed and adjusted. This is where you will benefit from the combined knowledge and experience of your support network. Your network may include your franchisor and their support staff, fellow franchisees, your accountant, lawyer and business banker. You may also have a business coach, mentor or a trusted friend to provide feedback. Almost any challenge you face will benefit from the support these people can provide.
At least once a year, you should undertake a complete review of your business and yourself.
As part of your action plan, consider your:
How has the business performed and what are your financial objectives for the next 12 months? Review with your franchisor and seek input from your accountant and other advisors. Consider your personal financial position. Are you getting a sufficient return for your efforts?
Are you making the best use of your business cash flow? In my experience an increasing number of businesses find themselves falling behind in their obligations to the Australian Taxation Office (ATO). Talk to your business banker about setting up a separate business taxation account to provide for your GST and other taxation obligations. This will keep the money separate from your general business trading account and reduce the risk of it being used elsewhere in your business. Remember that this is money you have collected from your customers and should be held separately.
Review your personal and business insurances. Don’t forget to include personal, temporary disablement, permanent disablement and trauma insurance. All too often people moving from paid employment into a business don’t cover themselves for the unexpected. A broken ankle from a fall could put you off work for six weeks and destroy your business if you don’t have sufficient insurance cover in place. Speak to your insurance broker or business banker who can tailor a policy to meet your requirements.
It has often been said knowledge is power and we all need to continually develop ourselves. Look at your weaknesses and develop a plan to build your knowledge and skills. For example, an understanding of financial statements will assist you in the business planning process. Can you calculate the break-even point for a business decision? Consider enrolling in some management courses at your local TAFE or Westpac’s Davidson Institute to build the skills you need. Your franchisor or fellow franchisees may be able to assist in pointing you in the right direction.
Industry Groups and Associations
Joining a local business or industry group is a good way to networking with others. Most meetings are held outside business hours and give you the opportunity to meet with likeminded people who may be experiencing the same issues and challenges. Meeting with people from outside your business circle can provide reciprocal business opportunities. Woman franchisees may consider joining a specialist woman’s group. An example of this is Westpac’s ‘Ruby Connection’ which runs a number of events and educational seminars for business women.
Businesses and their owners can benefit from targeted community involvement. This could range from sponsorship of a sporting group or charity event. A number of franchisors will assist in identifying an appropriate beneficiary and there is nothing more satisfying and rewarding than to see a tangible benefit to your community. This will also provide an opportunity for involvement of your staff members which adds to team camaraderie.
Work Life Balance
This is easier said than done. The risk of personal burn-out and relationship issues are high in the business sector. We all understand the need to divert all of your time and effort when establishing or learning your business however there comes a time to step back and look at your work life balance. This will not happen overnight, however, you need to set some goals and take time away. This may involve taking time to catch up with friends and family, play some sport or taking a family holiday.
Succession Plan or Exit Strategy
Look at your goals to eventually leave the business. Consider if you will pass the business on to your children or sell. Look at the current value of your business and determine the best time to sell. If your business is in a retail environment the term remaining on your lease and franchise agreement will impact the business value. Take control and look for ways to maximise your sale value. Speak to a business broker who specialises in selling franchise businesses.
As discussed earlier take time to select and develop a support group. The obvious starting point is with your franchisor and fellow franchisees. Meet with your accountant and lawyers regularly to review your position. Has anything changed since your last meeting? Are property leases and franchise agreements coming up for renewal? Does the franchisor or landlord have an expectation for you to spend money on a store refurbishment or equipment upgrade? Your business banker is well placed to assist you in reviewing your bank accounts and loan structures. They will be able to refer you to a range of other financial specialists - financial planners, equipment finance specialists, transaction specialists etc. New and improved financial products and services are being continuously developed and may save you time and money.
Look for a business coach, mentor or a trusted friend. This could be a formal arrangement with regular meetings where outcomes are discussed or a more informal catch up over coffee. Either way it is important to develop a meeting agenda and agree outcomes. To maximise the benefits you will need to move out of your comfort zone by challenging the way you do things. Not everything will work the first time however nothing points to a declining business more than the failure to continually improve and evolve.
Additional free information is available at Westpac’s Davidson Institute see website located at www.davidsoninstitute.edu.au.
Steve Seddon is Westpac’s Senior Business Development Manager – Franchising, Western Australia, Queensland and South Australia. He is a CPA and a member of the Franchise Council of Australia’s Western Australian committee.
Westpac continues a long-term commitment to the franchise sector in Australia. The bank has a national network of franchise specialist business bankers who are able to deal with the specific needs of the franchise sector.
Contact Steve at:
P: 0407 401 892