5 START-UP ESSENTIALS
What it takes to get your business in order.
Jumping into a new business as a franchisee is exciting, irrelevant of your age or experience. While first-time business owners will have concerns about the big step, franchising provides the support, experience and branding of a business that has already worked out a path to success. There are five areas crucial to a new business, but it is also worth considering the value of external advice before you take the final step to becoming a franchisee.
Independent counsel can be particularly beneficial when it comes to the financial, legal and leasing elements of a franchise business.
As you’re poised to sign up to a franchise and start your next great adventure, what fundamentals will you need to have in place? Certain key elements can help ensure you have an easy transition into your new life as a franchisee.
Meanwhile, here are the five essentials recommended by Inside Franchise Business:
Whether or not you have a relevant skill set for the business sector you have chosen to invest in, training will be a major contributor to starting out your new enterprise with a competitive advantage.
One of the great benefits of a franchise is the ability for new recruits to open the doors to their business already armed with the basic tools they need to start trading. Skilled masters and newbies alike benefit from learning the ropes and adopting the methods and processes that work for their particular business model.
Initial training should include simple business practices as well as technical and brand education. Keen franchisees will make the most of ongoing opportunities to train so they can refine techniques and customer service.
2 . WORKING CAPITAL
Cashflow wields an extraordinary amount of power over a business. No matter how well developed the franchise model, how efficient the franchisee, how strong a customer base, trouble with cashflow can be fatal.
Many a business, franchised or independent, has fallen foul of a cashflow crisis, and it can strike early on in the trading life of a business. This means it is essential to ensure you have enough funds, or working capital, to back up the franchise as you build up business as well as ride out the tough times when bills have to paid and for whatever reason the coffers are empty.
Take advice from the franchisor and other franchisees as to how much working capital you will need to start.
It could be a territory for a mobile business, or the site for a gym or shop – where you position your business will be crucial for its development. Advice from the franchisor about this is paramount, but it is worth backing up the information and guidance provided with independent expert opinion.
It is also worthwhile doing your own research on location. There is nothing like watching customer traffic for a coffee shop to give you a sense of whether or not the site is viable for your business.
4. EMPLOYMENT LAW
You may be start out as a sole trader and later employ a staff member, or perhaps you are buying a business that needs a team from the get-go. That means you need to be right on top of employment law.
In many cases franchisors can point you in the direction of the relevant awards and provide information from government bodies like the Fair Work Commission. Recently the Fair Work Act has been amended, making franchisors liable, in certain circumstances, for workplace breaches by franchisees. This means your franchisor may introduce new policies or systems.
Remember, however, that the law is quite clear: as a franchisee, you must ensure staff members are paid correctly at all times, and receive their due entitlements. If you are not clear about employment law, be sure to seek professional advice.
5. SUPERANNUATION AND TAX
Superannuation and tax are important payments, not just for employees, but for franchisees. Sometimes these payments can be overlooked in the rush to get a business up and running, but you can preclude this possibility by including the payments in your budget and business plan, and by scheduling reminders. Alongside franchisee fees, rent and utility bills, these costs cannot be avoided.
If you establish the payments in your financial structure from the start, it is one less headache as you progress, freeing you up to focus on building up your new business.