Category Archives: Franchising Business Practice

3 Ways to Build Your Business to Franchise It

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

We all know that when we first start out in business, we don’t actually know how to price our services and proucts. Make a concerted effort to really make sure that your pricing:

  • 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!

Advertisements

Millennials – A Potential Pot of Gold for Franchisors

I never really understood the term ‘millennials’ until I read this BNET (The CBS Interactive Business Network) blog article from Andrew Tilin aptly titled “What is a Millennial?”. Now, with his thoughts on what a cultural shift the emerging millennials will bring matched with the talent drain from the retiring Baby Boomers – its got me thinking!

If you are thinking of growing your business in the future, you need to seriously read this article and take heed of the global picture of what this cultural shift means for business in general. As a Franchisor, this will affect how you plan to market to prospective franchisees going forward – i.e. will you need to start some more community initiatives to grab a younger audience that will grow to be your perfect franchisee?

Andrew writes in his article that millennials have grown up in an environemnt which understands workloads, appreciates being appreciated, and thrives on technology – so they are confident in time scheduling, taking directions and are really comfortable with the online world (especially social networking). As a Franchisor, I would hope that you are ensuring that you are thinking really carefully about where you will find your new franchisees of the future, because it won’t be as easy as sticking an advert somewhere – the world is changing.

However – there is one main positive aspect which I really liked in this article and that is that this generation of “millennials” or Generation Y are a confident lot…we (because I am one) are happy to work hard, but we are only motivated to work for people in authority who deserve the respect and mentor us. To me, those characteristics are a great foundation for any franchisee.

Upon reading the comments that readers have also posted on this subject, I have to also point out that there are a lot of Baby Boomers who will not just disappear into blissful retirement. A lot of them still like working, even if in a more flexible manner – and this, to be honest, opens up another pool for Franchisors to delve into for prospective franchisees. These guys have life experience and have collected skills which are another goldmine for you – so don’t knock them out of the game just yet.

My message? Get more flamboyant with how you recruit franchisees – but also – think of the global trend of the age we now find ourselves in (the “Information Age”)…we have moved on significantly from the Industrial Age

Top Tips: Capturing Your Winning Formula

One of the very first questions I ask my prospective franchisor clients is ‘What is Your Winning Formula?’….and generally I get a blank look in return! That’s ok though, because that is a normal response.

How many of us business owners ever stop to work out what is working in what we are doing every day and what isn’t? The answer: few….but more than you would think. In franchising this is a crucial thinking step that needs to be taken before you can even consider growing using the franchise model. I’d like to give you some help though – its pretty difficult trying to step outside of yourself and work out what your formula is.

TIP 1: Listen to What Your Customers Say

When you get feedback from your customers on you; your customer service; or your product/service what do they actually say? I mean – look at things like:

  • The service you gave when they approached you
  • The service level by which you managed them through from “order” to delivery of the service or product
  • The way in which (system or process)  they were looked after (and communicated with)
  • The actual service or product delivered
  • Follow-up contact

TIP 2: Study What Comes Absolutely Natural to You

This is the hard one, because most people look too hard and can’t actually identify what that looks like. The best thing to do here is to engage your business circle of friends, contacts, staff and possibly even some trusted clients and ask them this question: What Would You Say is My Natural and Unique Ability?

I did this exercise a good few years ago – via email, so that I could record all of the responses – it was fab! Mainly because my circle very nicely highlighted what they perceived to be my strengths as a consultant – which helped me to be better placed to ‘market’ myself.

Purpose of this TIP is to really get to the crux of what makes your business stand out from the competition because of what YOU actually add to the mix.

TIP 3: Describe the ‘System’ By Which You Work

Everyone has a process cycle they have created in their business – what does yours look like? So, from the point of starting to market your product/service to the end result of having sold something to a client and having successfully completed the cycle….jot this down…step-by-step. (And if you have a good client follow-up or retention scheme…then of course add this in.)

TIP 4: Map It Out

Take your observations and notes from TIP 3…and map it out on a big A1 size flipchart. Then, in different colours, take the feedback and notes you have made from TIP 1 and TIP 2…and bulk up the detail around the flow diagram you have drawn of your process.

TIP 5: Stand Back and Observe

Now, after having completed the TIPS and exercise described above…stand back from the flowchart and have a good look at what you see.

  • What stands out clearly for you (as a Unique Selling Point) of your process
  • Are there any bits that could be taken out (in order to streamline the process and create a tighter model)
  • What is missing (if anything)..and if you just added that one thing it would really make the whole model

In closing…

By steadily working through those tips – you should get a pretty good idea of what your winning formula is. It will become clearer to you perhaps even a few weeks after you have done the exercise – because other seeds start to drop in your mind and you go “Ah, hey…that’s another thing that makes my process (formula) work smoother and convert custsomers faster. Let me jot that down…”

This is an exercise that can go on for weeks….so don’t try and do it overnight and set yourself up for disappointment when it doesn’t all become very clear instantly. You will get there – I promise. And when you do – and you have “bottled” that formula…you will be ready to replicate it!

Let me know how you get on…by commenting on this post (ask me questions too if you need to!) and/or going to my Facebook Page which you can find by clicking here.

Find Your Pizzazz Magnet

If there is anything that the economic climate over the last few years has taught us – its that you have to hold on to the people who are incremental to keeping your business going. Problem is…which business owners are mature enough to identify that they are nothing without the team behind, alongside and in front of them? Well…the answer is very few.

The franchising world is not different by any means – a franchisor is nothing without his franchisor team nor his network of franchisees. So, action must be taken to identify what your PIZZAZZ is…capture it, protect it and nurture it. Now, you’ll be asking yourself – what on earth is she on about?

Well, one of the success factors in businesses that consistently grow and improve their profits year on year – is EMPLOYEE LOYALTY. If your team love the work they do, enjoy the environment they are in and more importantly are supported in moving forwards in their careers – you are more likely to have a business that is growing naturally and encourages profits to steadily increase.

One of the biggest elements I bring home to any prospective franchisor I work with is that if you create a business that is motivating, sustainable and full of potential…that in itself will attract fantastic franchisees your way. It costs time and money to recruit franchisees – so once you have brought one into the fold – the last thing you want is for them to leave.  In my strategic planning phase of work with a new franchise client – we map out the franchisee’s life span over 10 years (preferably covering two franchise terms approximately) – and plan for their growth as a franchisee and as a business owner. This way you can already have the right things in place to cater for the way the franchisee will mature and change…and as a result…their comfort needs will change. By pre-empting these need changes as a franchisor, you will give the impression of being emotionally intelligent, engaged in your business, supportive and more specificially…a franchisor worth staying with!

If you know what your Pizzazzz is in your business (i.e. the MAIN thing that attracts people to you/your business) – then make very very sure that you know how to maintain it and infiltrate it into your business model. There is nothing more satisfying than hearing your very own employees, associates or franchiseees (in a franchise case) “sell” you and/or your business to everyone they see and come into contact with. That in itself is priceless.

In the world of social sharing that we are in – you need to maximise the loyalty you have in your team, feed it, nuture it and then turn it outwards into the digital world – because that’s where your Pizzazz becomes viral and magnetises you as a brand and a business that people want to buy from, work for and buy into.

I’m interested to know what your Pizzazz is? Let me know by commenting on this post and please do share it with your colleagues, business contacts and your own readers – it would be really great to hear from as many people as possible!

________________________________________________________________

Find out more about social media engagement by checking out my other business called Social Intelligence….we teach you how to engage ‘intelligently’ and how to engage your team to use social media as a megaphone to shout about your brand and draw business to you. You can have a look at the website here, find us on Facebook here or follow us on Twitter here.

Recruit SMART, Grow SMARTER

One of the (many) things I do harp on about to new prospective franchisors is: be specific and very clear about what a good franchisee looks like and then go out and with the precision aim of an assassin….find them, bring them on board and LOOK after them.

Franchisee recruitment is not dissimilar to normal business staff recruitment. You need to be incredibly mindful of the ‘job’ at hand, what the skills are that are needed to carry out that ‘role’ successfully and most of all…look for what the career growth path would be for that individual. The extra element that you want to perhaps plan for in recruiting for franchisees is cultivating a ‘perfect’ franchisee who will end up with the operational, hands-on experience that might well be useful to you in 5 to 10 years time.

What do I mean by this? Well, if you are smart (and I hope that you are) – you are setting up a franchise with two views:  1) To Grow and 2) To Exit. By recruiting some golden nugget type franchisees who have the special ‘putty’ to become fantastic, you will be sowing the opportunity for having a managing director, operational manager or even a team of super-staff who will add value and a glow to the business…making it even more attractive to a buyer. Having a team that doesn’t purely hinge on you or your operational knowledge makes a business very sellable.

Bear in mind, these individuals would not remain as franchisees should they start to work for the franchisor – so you will need to think about what you can offer them that will make the career move from business ownership more enticing. Some suggestions on what to offer them:

(a) Taylored package that is heavily incentivised by their results and input (commission %; target incentives like holidays; etc)

(b) Good company benefits (which are rare to find, especially in the UK, and will therefore be very attractive!)

(c) Small shareholding in the business (relative to their role of course)

(d) Input into how the business grows going forward (i.e. make them an integral part of the executive team)

I’m sure there are many more elements you could incorporate into  a package to tempt an existing franchisee into your franchisor fold, all I’m saying is – bear this in mind right from the beginning. Imagine having a team of strong franchisees who (at any point) you will love to be your right hand man/woman? Now compare this picture to merely having the recruitment criteria mindset that anyone with a pulse will be accepted to become a franchisee! (My fury over this point is enough to write a whole post just on this!)

So, what’s my message? When you are planning who you are going to have as part of your network: think long and hard about where you want to be in 5 to 10 years time and how much value you can add by recruiting the right people. By being SMART in your recruitment tactics, you will be growing your business in a much more planned and efficient way (i.e.SMARTER growth!)

Rise of the Green-Collar Phenomenon

I’ve come across the term ‘green-collar sector’ and was intrigued to learn more. As a responsible person-of-the-planet I do feel that if you can choose to do something in an eco-way, then do it.

I was always brought up to believe as a child that ‘waste not want not’. For example: in South Africa (where I am from) you are very aware of how precious water is so you do not leave a tap running (while washing dishes, while brushing teeth, etc) because you never know when a drought is going hit. Also, at the dinner table…you never leave anything on your plate (because there are starving people all over the world and you do not waste food).

So, when I saw this ‘green-collar’ term being used, I was interested to read how this was infiltrating into the world of franchising.

As slightly predictable (at least in the UK), it seems the property market is being targetted as the ‘industry’ of choice when it comes to choosing a franchise business that is eco-friendly. The ones I could find are based on:

  • Eco-friendly property maintenance/home improvement
  • Improving air quality in the home
  • Enery efficiency reporting for properties

I’m sure there are more! I know of some children’s franchises that are aimed at the eco-market which are fabulous and are really just bringing things back down to the good old days when we used to just use what was lying around the house; keep using items until they were broken or worn out before buying a new one; etc.

I would be really interested to hear more about the evolution of green-collar franchises and hope that they will be both genuinely eco-minded and ethical in the structure of their business models.

How could you bring in some eco-ways to operate your business? Well, here are a few of my suggestions – take from them what you will and if you are doing some that I haven’t mentioned, please do drop me a comment and let me know!

  1. Only have staff come in on certain days (work from home on other days) – save on petrol/carbon emmissions
  2. Recycle everything that you can in your office (paper, cardboard, tins, printer cartridges, etc)
  3. Buy recycled goods (e.g. paper, folders, etc)
  4. Hold virtual meetings with national staff (avoid long travel and staying in hotels)
  5. Re-use folders (lever arch files) from one year to the next
  6. Use a server host who has eco-friendly systems
  7. Try to keep as much written communication saved on your harddrives (less printing) as possible

If more and more franchisors could incorporate a green ethos within the modelling of their franchise offerings imagine what a difference that could make in growing businesses for the future. Wouldn’t it be great if it almost became a STANDARD in all franchised businesses?

21st Century Franchising

Although I am an advocate for keeping business simple and always stick to the basics to keep your business model solid and sustainable – there is one more thing I definitely am an avid fan of: TECHNOLOGY & INNOVATION.

These are two areas where I really do feel that Franchisors have to step up. When I work with prospective Franchisors who are planning their ‘start-up’ three years as a new Franchisor, we spend a lot of time making sure we have not only highlighted what kinds of support and tools he/she will be providing the franchisee, but we back that up with a sustainable plan about how the Franchisor will offer that support or tool.

Now, in the world we live in today, this does not mean the Franchisor would have to set-up a big office, hire lots of staff and work tirelessly to try and break even, much less enjoy the growth path! My advice is to look at what is important in the delivery of the support/tool and how or what is the best way to deliver it that is not only cost effective, but promises to be personalised and professional.

This is the fun part of the Franchisor drawing board for me. We start to do some research on who is out there in the market in terms of being good at creating, developing and delivering the support service or tool that  we want for the franchisees. Partnering up with specially selected (and qualified) providers can really help a start-up Franchisor be able to hit the ground running and deliver the business support promised from the word go. There are some fantastic outsource providers you can use to provide professional support to your franchisees – just be open to looking for them and finding them! Some suggestions on the support side:

a) Personalised Virtual Assistants to take care of administration, call answering, customer care/follow-up, etc (carefully chosen – recruit the business as you would a staff member)

b) Business mentors/coaches – again select as you would any staff member you would normally employ. By getting these guys on board you are providing your franchisees with professionals who are proficient in their subject and will make the world of difference

c) Franchisee Incentives. Find a business that will help monitor the great performance and also manage incentive /loyalty/ performance plans – so that good franchisees feel appreciated and ‘not so great’ franchisees are picked up on and perhaps then highlighted for more support or training (or at worst – disciplining)

Also, there is a huge amount technology out there (some free) that you can build into your franchise model to ease the day to day management of the network (as well as for the franchisee’s day to day business).

By being open to technology and innovation, you will be better placed to keep creating systems that not only work very well and are cost effective, but they also don’t depend on you (the Franchisor) having your hands on everything all the time.

GTH56P4TNB9S