5 START-UP ES­SEN­TIALS

Inside Franchise Business - - Contents -

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:

1. TRAIN­ING

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.

3. LO­CA­TION

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.

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