10 Tips for Franchise Success
Why do some franchises thrive while others end up with a “closed for business” sign in the window? Sometimes the franchise concept or location determines success, but a lot of it has to do with you, the franchisee. Making smart choices every step of the way, and avoiding certain pitfalls, can make a big difference to your bottom line and your franchise’s viability. Read on to find out 10 ways to improve your odds for franchise success.
1. Choose the right business for you
Franchisees whose skills are a good match for the business tend to do better than those who are not in their element, but how do you know if the concept that you’re buying is right for you? It’s really quite simple: ask yourself what you like to do. However, don’t just think about the product or service, but what your actual daily tasks will be. You may love to cook, but owning a restaurant will be about more than just food. In fact, your primary tasks will involve managing, hiring, training and firing staff.
2. Improve your business skills
While franchisors will teach you their system to help you build a successful center, most also expect you to bring some basic business skills to the table. If you don’t know accounting basics, how to read and work with financial documents or how to hire and fire employees, you’re going to encounter trouble. If your sales skills are rusty, your knowledge of business taxation is a bit shaky or you’re not up to date on Internet marketing, consider taking a class to improve your skills. Continue to upgrade your knowledge annually. These classes are often available at a local school and there are even one day seminars and webinars that take less time and monetary investment.
3. Follow the system
If you implement changes on your own, particularly in the early days, you could put your franchise at risk to run into unforeseen consequences that the franchisor already anticipated. Don’t try to be a rebel. Only make changes after speaking about your concerns at length with your field representative. By taking this approach, you can avoid making a rash error.
4. Have a business plan
While the thought of putting together a business plan might be intimidating to a franchising novice, it doesn’t have to be. It can be as simple as setting some goals and doing a financial projection for the next year, or it can be detailed enough to take to the bank. When in doubt, ask your franchisor or fellow franchises for advice on how to proceed.
5. Play well with others
Corporate employees are dedicated employees who do everything they can to make franchises successful, but first and foremost they are people. Your efforts to respect and listen to them will pay dividends for you.
6. Take control
Part of the appeal of the franchise system is the support that a franchise can provide. However, the ultimate success or failure of your franchise is largely your responsibility. Yes your franchisor is going to train you on its systems and give you the tools to build a business, but you will be on your own to run the day-to-day operations in you center. You can call the franchisor with questions, be the decision will ultimately be yours.
7. Never stop marketing
As a franchisee, your job, first and foremost, is the sales and marketing of your product or service. Do not wait for your franchisor to remind you, get your marketing out there all the time, analyze the effectiveness of each method, and share effective techniques with your fellow franchisees. If you’re busy working on your computer or handling other administrative tasks over marketing initiatives, you are limiting your success.
8. If you can’t sell, hire someone who can
Simply put, some people just don’t like to sell. They aren’t comfortable picking up the phone or working a room. However, sales are am inevitable part of any franchised business. If you don’t feel comfortable handling this task , you need to find someone who will. Ask for help from your franchisor and fellow franchisees who have effective salespeople on staff. Instead of hiring someone just like yourself because you like them, recognize that as a business owner, you’re going to need to leave your comfort zone and hire someone with a different personality and skill set.
9. Avoid credit cards
The incredibly high rates in this expensive form of credit can slowly eat away your profits. Real financing at a reasonable rate is hard to get, but not impossible. Make sure that you have plenty of cash before you launch your business, and seek financing immediately if you see a downturn in your future.
10. Learn your industry
Once your franchise is up and running, learn as much as you can about your new industry. Almost every sector has associations and meetings where business owners gather and share ideas. Trade associations and local boards of trade bring together new and established businesspeople, providing a great forum for learning and networking. Your fellow franchisees can also offer great insight into your industry, don’t ignore this valuable network.