DRIV­ING BUSI­NESS

Inside Franchise Business - - Contents - NEIL SOARES AND HOLLY BARNES

Set a road-map for your fran­chise jour­ney.

CJust like any ad­ven­ture, your busi­ness jour­ney needs care­ful prepa­ra­tion and plan­ning, with due cau­tion for bumps along the way, but fran­chisees have one big ad­van­tage in that

they are not trav­el­ling alone.

on­grat­u­la­tions if you have signed up to be a fran­chisee. You are ready to launch into your ex­cit­ing new busi­ness, and prob­a­bly en­vis­age it will be ev­ery­thing you have ever hoped for. You can up­date your LinkedIn job ti­tle, or­der the busi­ness cards and pre­pare for your fu­ture suc­cess.

Like any busi­ness owner, you be­lieve the re­wards will al­ways out­weigh the blood, sweat and tears. But how do you en­sure your new busi­ness in­vest­ment will make the cut in this ex­tremely com­pet­i­tive mar­ket?

You know it is go­ing to be slow at the start, but you have the de­ter­mi­na­tion to ig­nite the process and push ahead. But where to be­gin? Firstly, cre­ate a frame­work for the first year or two, and you will be well placed to suc­ceed in your busi­ness jour­ney.

There are im­por­tant point­ers to re­mem­ber and an­tic­i­pate on the ad­ven­ture. The first is your busi­ness plan, in­clud­ing set­ting up your trad­ing en­tity. Whether you run it as a fam­ily trust, as a sole trader or as a com­pany, the busi­ness plan will help you to an­tic­i­pate the fu­ture, min­imise tax and dis­trib­ute profit. It is also im­por­tant to rely on a good ac­coun­tant.

Your busi­ness plan should also iden­tify the work­ing cap­i­tal you will need to se­cure your busi­ness un­til it be­comes prof­itable. This will de­ter­mine how long your busi­ness can sur­vive pay­ing its over­heads such as rent, wages, cost of goods and roy­al­ties, as well as your per­sonal liv­ing ex­penses such as mort­gage and school fees.

TALK TO PEO­PLE

An­other im­por­tant as­pect of your plan­ning is to talk to peo­ple who have been on the same jour­ney. Seek ad­vice from other fran­chisees in the net­work you are con­sid­er­ing join­ing, not for­get­ting peo­ple who may have aban­doned their quest – fran­chisees who have left the net­work for what­ever rea­son. It is most im­por­tant to weigh the ad­vice from other way­far­ers be­fore you set out on your jour­ney.

Hav­ing a busi­ness plan is sim­i­lar to hav­ing a roadmap: it is a guide to help you reach where you want to go. A busi­ness plan keeps your des­ti­na­tion (goals) in

view, fo­cuses the mind and com­pels ac­tion. It also means that should you start to go off track, you have a point of ref­er­ence to re­turn to so you can ad­just the course as needed.

Your busi­ness plan cov­ers the es­sen­tials of your busi­ness jour­ney...

• Your goals (des­ti­na­tion)

• Your steps to achieve these

• The bud­get you will need

Along your busi­ness jour­ney you also have ref­er­ence to the fran­chise op­er­a­tions man­ual, and train­ing. And to help you breathe eas­ily, the doc­u­ment af­firm­ing in­de­pen­dence of ad­vice that ac­com­pa­nies the dis­clo­sure doc­u­ment is an as­sur­ance for you that the fran­chise has been re­viewed by ex­perts.

Un­der the Fran­chis­ing Code of Con­duct you are re­quired to sign and ac­knowl­edge that you have taken in­de­pen­dent le­gal, busi­ness and fi­nan­cial ad­vice about a fran­chise agree­ment and any other rep­re­sen­ta­tions made by a fran­chisor – or that you de­cided oth­er­wise. But like any jour­ney, it is wise to have travel in­surance, and pay­ing for spe­cialised fran­chise le­gal and fi­nan­cial ad­vice is cer­tainly a good pol­icy.

SHORT-TERM SAC­RI­FICES

Who goes along with you on you fran­chise jour­ney? Your fam­ily, of course, so it is im­por­tant they are all en­gaged and equally fo­cused on help­ing you achieve suc­cess. Af­ter all, your fam­ily will ul­ti­mately ben­e­fit from your hard work. Fre­quent transparent com­mu­ni­ca­tion is cru­cial to re­tain fam­ily sup­port, as the re­al­ity is that there will be long hours, missed hol­i­days and un­ex­pected com­mit­ments. How­ever, the long-term ben­e­fits far out­weigh the short-term sac­ri­fices.

But what­ever bumps there are in the road, you al­ways have your “GPS nav­i­ga­tion” to fall back on – your fran­chise sup­port team, in­clud­ing the busi­ness

devel­op­ment, area or re­gional man­ager, who are ready to help if you stum­ble. Ev­ery step of the way you are not alone. This is one of the key ben­e­fits of own­ing a fran­chise busi­ness and work­ing with an es­tab­lished brand.

You are in this po­si­tion be­cause you have done your re­search. It is an op­por­tu­nity that al­lows the in­de­pen­dence of small-busi­ness own­er­ship while be­ing sup­ported by the ben­e­fits of a big busi­ness net­work. Fran­chises have a higher suc­cess rate than startup busi­nesses, and fur­ther­more, it is far eas­ier to se­cure fi­nance for a fran­chise. With all these ben­e­fits, your jour­ney should be far less bumpy.

Along your way, ob­serve all the

It is most im­por­tant to weigh the ad­vice from other way­far­ers be­fore

you set out on your jour­ney.

“road rules”: meet all your fran­chise agree­ment obli­ga­tions, pay your roy­al­ties and levies, and en­sure you cover your em­ployer obli­ga­tions. You can also keep on track by re­view­ing your busi­ness plan at least once a year with your busi­ness ad­vi­sors and your fam­ily.

BE ALERT

Be aware of what is hap­pen­ing around you. Do not be­come “store blind”, fail­ing to ob­serve small changes or mis­takes. Be alert to un­ex­pected in­ter­rup­tions such as chang­ing mar­ket con­di­tions, in­creased com­pe­ti­tion and sea­sonal fluc­tu­a­tions. On the other hand, watch out for op­por­tu­ni­ties to grow your busi­ness. Mon­i­tor the mar­ket, stay hun­gry and be flex­i­ble.

Don’t for­get to use your op­er­a­tions man­ual. It of­fers plenty of in­for­ma­tion de­signed to help you reach your full po­ten­tial. It is a step-by-step guide to ev­ery as­pect of the busi­ness.

Fi­nally, gauge your progress by mon­i­tor­ing the re­turn on your in­vest­ment. You need to de­ter­mine the time frame to pay back your orig­i­nal in­vest­ment and in­ter­est on any loans. You need to en­sure your fran­chise agree­ment and any leases are long enough to meet those obli­ga­tions, as well as pay your­self a rea­son­able wage. Ide­ally, when you are ready to sell you should have a cap­i­tal re­turn that makes all the sac­ri­fices along the jour­ney worth­while.

Mean­while, don’t let any­thing stop you from plan­ning fur­ther ven­tures. Have a plan, use it, change it, but keep your long-term goals in mind, such as multi-unit ex­pan­sion or con­sol­i­dat­ing the busi­ness for your ideal lifestyle.

DC Strat­egy

Neil Soares has first hand ex­pe­ri­ence in the fran­chis­ing space. He has over 25 years of ex­pe­ri­ence in fran­chis­ing op­er­a­tions, busi­ness con­sult­ing and busi­ness devel­op­ment around Aus­tralia. Holly Barnes is a valu­able as­set of the DC Strat­egy Group. She has ex­ten­sive mar­ket­ing and re­cruit­ment ex­pe­ri­ence hav­ing worked for in­ter­na­tional or­gan­i­sa­tions in South Africa and London.

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