Opting to become a franchise can be an extremely attractive prospect when considering entering into the world of business. Starting your own independent company can seem intimidating, so having the support from and reputation of a known brand from the word go can help to ease a lot of the anxieties involved in such a risky venture. However, this route, despite being the easier option, does not come without its difficulties. Here, we break down the main priorities when it comes to opening a franchise, to help you decide whether this could be a realistic goal for you.

 

Practicalities

Before you have even begun, you need to make sure you are choosing the right kind of franchise to become involved in. There are a number of important things to consider here, starting with the industry. What kind of person are you; what are you interests and your goals, and what kind of business would you be best suited to? For example, would you like to contribute towards the healthcare industry, do you have talents that the creative world could make the most of, or are you up for the challenge of tackling a fast food business? Are you the kind of person who would prefer to be able to run a business from home or be in the heat of things?

You need to be able to invest not only funds but also your time and energy into your business, and for this you need to be able to enjoy what you do. What kind of brand could you really get behind and lend your full support to; helping it to reach higher heights? Are you able to invest the significant capital required to open a branch of a well established and known company, in order to reap the rewards of such? For example, McDonald's is one of the biggest franchises in the world and they require their franchisees to have a capital of $545,000 in order to open a new branch. Or would you feel more comfortable with less risk but less potential profit?

Other things to take into consideration are the location your business would require and what this could mean for your commuting times. How well would you be able to manage a business on a larger scale, and would something more humble be better suited to your goals? Finally, what kind of hours would you be able to contribute to the running of your franchise and what impact does this have on the realistic industry options available to you?

 

Strategising

Once you’ve reached a decision on the kind of business you’d like to open, it’s time to think about the day to day reality of running it. One of your key priorities will always need to be your business strategy. It’s important to set goals and objectives and put plans in place for how you are going to achieve them. Part of this process is reviewing the success of strategies you have used, and making alterations.

Strong operational management requires a proactive and innovative nature that can find new solutions to new problems, as well as integrity which will ensure that you follow these solutions through. You also need to be able to spot potential issues before they arrive, as prevention is often much easier than cure.

 

Customer Relations

One of the key advantages to opening a franchise is that you have a ready-made customer base to profit from, which would normally be one of the biggest challenges facing new, independent businesses. However, how you manage your customers could be the difference between keeping them loyal or losing them. Companies with a customer experience mindset drive revenue 4-8% higher than the rest of their industries. You need to prioritise customer relations, so if you find that you don’t have the time to dedicate to this it may be worth considering solutions such as outsourcing your customer service to a communications provider like Cymphony. They can lend an expert hand and nurture customer relationships, at a fraction of the cost it would take to hire an in-house team.

 

Leadership

People management is a key skill that you will need to possess or quickly develop if you want to run a successful business. You can choose to be what is known as an absentee leader, which essentially means leaving the day to day, face to face management in the hands of others while you lead from afar. However, if you’d prefer to have greater control over your success, it might be better to be at the helm of the ship.

Managing your staff well can be one of the trickier aspects of business. It’s important to be able to gain their respect which is only possible if you treat them with the same, yet having to carry out disciplinary procedures is an inevitable necessity too. Navigating these difficult waters well can lead to a body of loyal staff who you can depend on to contribute their best to your business, however, making mistakes can lead to a high turnover of staff which, in turn, means a lot more work for you and inconsistent business performance.

 

Staffing

This leads me to my next point; the staffing process will be an important aspect of running a franchise, just as it is for any business. If you do it well, it won’t be too time consuming as you will be able to nurture long term relationships with your employees. However, it can become a real burden if you don’t prioritise carrying it out properly, as this can lead to a high turnover of staff.

When recruiting, it is important to consider how you are going to go about finding and attracting the right people for your business. Do you need experienced members of staff who can bring a solid skill set, or do you need younger graduates full of fresh ideas? Where are you most likely to grab their attention; online job sites or newspaper job pages? What can you offer them that would make working for you a sensible choice? Is it job progression, perks, or a competitive salary?

 

Training

Once you’ve made a new hire, you will need to provide them with the training they need to succeed in their role. One benefit of choosing the franchise option is that in some cases the franchise owner will provide training resources as so many of the skills they need to develop are the same across all branches of the business. However, if not, careful investment of time and money into this process can make a huge difference to the contribution your new staff are able to make to your venture. 76% of employees say that a company would be more appealing if it offered additional skills training to its staff, so it’s also worth considering the impact it could have on employee retention.

 

Finances

Looking after the financial side of your business should always be a priority. Most businesses employ an accountant to help them keep on top of things and make sure they are meeting what is required of them from the government. However, even then, you need to be proactive when it comes to record keeping. Luckily these days there are a number of digital solutions to business finance, which automate this process and make it much easier. Don’t forget that as a franchisee a percentage of your profits will go to the franchise owner, which you will always need to account for, though it can be a small price to pay for the return you receive.

 

Rules and Regulations

A downside of being a franchisee if you’re someone who enjoys control, whereas it could be seen as a positive if you welcome guidance and structure, is the fact that there are rules and regulations to follow that are set by the franchise owner. This might be in the form of reporting weekly figures, or perhaps carrying out certain processes and procedures. They will also expect you to uphold the reputation of the brand. Either way, it is important to keep up regular communication with the franchise owner. Not only will this give them peace of mind that you are proactive when it comes to achieving company-wide objectives, but it will also give you the opportunity to make the most of the help on offer from them. This is one of the main advantages of opening a franchise; the support available throughout your business journey.

 

Innovation

As well as leaning on the structure provided by the franchise owner, it is important to consider where you could innovate in order to build on the brand with your own personal contribution. Could you offer new solutions to problems experienced by every branch? Could you think of ways to attract new customers to the company as a whole. How will you make your stamp?

To conclude, there are a number of priorities to juggle as a franchisee, from the practicalities, strategising and operational management, to dealing with staff, customers and finances. However,  if you plan your approach carefully, and follow through on your objectives, this can be a highly rewarding and risk free way to enter into the world of business successfully.

Next week we will be considering how these priorities change over time as your business goes from strength to strength, and how unforeseen challenges such as the Covid 19 pandemic can change the face of business management exponentially.

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