FRANCHISEES ARE NOT ALONE
in this article:
Daniel Cloete & Steve Seddon from Westpac look at how franchisees can work on their businesses
As the owner of a franchised business, you’ll experience your fair share of challenges. But whether you’ve been a franchisee for one month or 10 years, you should always take time away from the daily routine in your business and invest it in working on your business.
By this we mean look at the big picture, identify any threats and opportunities to your business and develop a detailed action plan. This plan will become a ‘living’ document to be regularly reviewed, analysed and adjusted.
But you don’t have to do it all yourself. This is where you will benefit from the combined knowledge and experience of your support network, including your franchisor and their support staff, fellow franchisees, your accountant, lawyer and business banker. You may also have a business coach, mentor or a trusted friend to provide feedback. Almost any challenge you face will benefit from the support these people can provide.
Then at least once a year, you should undertake a complete review of your business and yourself with input from your ‘team’. Here are some of the areas to consider.
How has the business performed and what are your financial objectives for the next 12 months? Review the Key Performance Indicators with your franchisor and benchmark them against other franchisees in similar situations. Seek input from your accountant and other advisors. Consider your personal financial position. Are you getting a sufficient return for your efforts?
Are you making the best use of your business cash flow? In our experience, an increasing number of businesses find themselves falling behind in their obligations to the IRD. Talk to your business banker about setting up a separate business taxation account to provide for your GST and other taxation obligations. This will keep the money separate from your general business trading account and reduce the risk of it being used elsewhere in your business.
Review your personal and business insurances. Don’t forget to include personal, temporary disablement, permanent disablement and trauma insurance. All too often, people moving from paid employment into business ownership don’t cover themselves for the unexpected. A broken ankle from a fall could put you off work for six weeks and destroy your business if you don’t have sufficient insurance cover in place. Speak to your insurance broker or business banker, who can tailor a policy to meet your requirements.
Knowledge is power, so we all need to develop ourselves continually. Look at your weaknesses and develop a plan to build your knowledge and skills. For example, an understanding of financial statements will assist you in the business planning process. Can you calculate the break-even point for a business decision? Consider enrolling in some management courses at your local Chamber of Commerce or financial institution or attend one of Westpac’s Managing Your Money workshops to build the skills you need. Your franchisor or fellow franchisees may be able to assist in pointing you in the right direction.
In addition to your own franchise, look outside. Joining a local business or industry group is a good way to network with others. Most meetings are held outside business hours and give you the opportunity to meet with like-minded people who may be experiencing the same issues and challenges. Meeting with people from outside your business circle can provide reciprocal business opportunities.
Female franchisees may consider joining a specialist women’s group such as Westpac’s Women in Business initiative, the Venus Network or Professionelle.
Businesses and their owners can benefit from targetted community involvement. A number of franchisors will assist in identifying an appropriate charity or sports team, or even insist their franchisees get involved in the local community. There is nothing more satisfying and rewarding than to see a tangible benefit to your community. This will also provide an opportunity for involving your staff members, which adds to team camaraderie.
The risk of personal burn-out and relationship issues is high in the business sector. We all understand the need to concentrate your time and effort when establishing or learning your business, but there comes a time to step back and look at your work/life balance. Set some goals and take time away from your business – you (and it) will be all the better for it. Catch up with friends and family, play some sport or take a family holiday.
Look at your goals for when you eventually leave the business. Will you pass the business on to your children (if they want it) or sell? Look at the current value of your business and determine the best time to sell. If your business is in a retail environment, the term remaining on your lease will impact the business value, as well as the length of the franchise agreement.
Take control and look for ways to maximise your sale value when the time comes. Speak to a business broker who specialises in selling franchise businesses and consult your accountant about preparing the business for sale up to three years ahead.
The above headings offer you the basis for a formal review process, but your business will run much more smoothly if you arrange regular meetings throughout the year with members of your support group.
The obvious place to start is with your franchisor and fellow franchisees – they’ll understand the challenges you face better than anyone. Then there’s your accountant, your lawyer and your banker – meeting with them regularly will help you address issues before they become problems. Has anything changed since your last meeting? Are property leases and franchise agreements coming up for renewal? Does the franchisor or landlord have an expectation for you to spend money on a store refurbishment or equipment upgrade?
Your franchise business banker is well placed to assist you in reviewing your bank accounts and loan structures. They will be able to refer you to a range of other financial specialists: financial planners, equipment finance specialists, transaction specialists, etc. New and improved financial products and services are being continuously developed and may save you time and money.
If you have a business coach or mentor, ensure that you have regular meetings with an agenda. Agree actions and outcomes – and ensure they hold you to them. In this way, you will continue to make progress towards your agreed goals. And don’t forget to involve your staff and share goals with them where appropriate. After all, they are in the best place of all to make things happen.
Successful businesses continually improve and evolve. As a franchisee, you have a huge amount of support and information available to you. Make the most of those around you to help you make the most of your business.
The information contained in this article is intended as a guide only and is not intended as an exhaustive list of matters to be considered. Persons entering into franchise agreements should seek their own professional legal, accounting and other advice.
This advertorial is taken from Franchise New Zealand magazine Year 25 Issue 1
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This material is copyright © Franchise NZ Marketing Limited, Franchise New Zealand ™ magazine and Franchise New Zealand On Line . While it may be downloaded for personal use, no part may be reproduced in any form whatsoever without the specific written permission of the publisher.