If there is anything that this recession has taught me as a franchise consultant – its that if people were afraid to grow before, they are damn near petrified to do it during a recession. Its such a pity – although you can understand when part (or two thirds) of the recession is based on the bank’s poor management or utilisation of financial tools. The small entrepreneur doesn’t have the support or resource of funding from a “trustworthy” institution to help spur and encourage his growth.
So, after reading a blog article about the ways to build your business on a budget, I thought that after the year I have had on the consulting front – it wouldn’t hurt to put together my Top 3 Tips on how to build you business towards franchising…so that you can do it in the next 2 years and not wait for the banks to sort themselves out.
TIP 1: PROVE AND DOCUMENT THE MODEL
Everything you are doing now is fantastic, but want I’d like you to think about is actually taking it a step further. Take an extra 30mins to an hour a day to reflect on the system or process that you enacted or initiated in that day – map it out and put it to one side.
At the end of the month – pull out the maps you have done through the month and stick them on your wall so you can stand back and look at them. This is a nifty way of trying to “third” position your business and pretend you are looking purely at the flow of actions. Do they make sense? When did you last update them? What is the most effective way to do something? What obstacles have you overcome?
These elements are the bits that will heighten your value to a prospective franchisee.
TIP 2: PRICING FOR PROFIT
- Includes a true reflection of the time and effort you put in to market and deliver the service/product
- Covers all costs incurred to put that service or product together (don’t forget delivery and collation where applicable)
- Includes a good margin for profit (anywhere between 15% and 30%) – don’t forget that this is why you are in business
If you haven’t done a good competitor litmus test on pricing – make sure you take the opportunity to …and compare like for like. Pricing is big hurdle for newbies to business – but having this sorted for a franchisee and having proof that the product/service sells (well) at those prices – that’s a big PLUS.
TIP 3: PUT IT IN A PRETTY DRESS
We all know that it takes a lot of hard work to make a business successful and there are no “real” easy fixes, however…we also know that if we love what we do …the degree of “hard” diminishes. If you are thinking of growing your business and want to consider franchising…make sure you make the proposition attractive enough to get the deserving interest.
I’m not saying lie about what the business entails – I mean make sure that you build in the elements that would make the business look exciting and enticing to join (look at elements of branding, support, tools, alternative avenues for revenue, etc). A pretty dress attracts the interest, but its the person (or business) wearing it that will retain the attention – if that makes sense at all!
So – take those three tips and build your business towards the opportunity of growth (while we wait for the dearly mis-directed banks to get their act together and see that businesses need them to help them grow and pick the economy up!)
If you have any comments. questions or feedback you would like to give about your experiences of trying to grow in this environment – please share them with me below!