A wise person once said: “Tomorrow belongs to the people who prepare for it today!” There is much to be said for taking time out of your business to work on the business. Before we know it 2020 and the new year will be upon us and for those franchisors and franchisees who do plan ahead, success will come more easily than for those that are on the back foot early next year.
Why is business planning so important? The answer is that it provides a strategic roadmap of the route ahead. And, let’s face it if you don’t know where you are going, you are unlikely to get to your destination any time soon!
Having a plan in place, which indicates key milestones and timing, focuses tactical effort and keeps the franchise moving forwards. In addition to general goals, you also need to be thinking ahead about changes which may affect your franchise and work them into the plan. From an accounting point of view HMRC’s move to Making Tax Digital (MTD) will affect all businesses from April 2020 and is worth some early consideration if you haven’t done this already.
Last April, MTD meant we saw VAT registered businesses with a turnover above the threshold of £85k needing to keep digital records and submit quarterly returns digitally to HMRC. From April 2020, all businesses will also need to comply (unless they turnover less than 10K per year). This means the excel spreadsheet and shoe box of receipts is out and cloud-based software for accounting is in.
If you are not using systems such as ‘QuickBooks Online’ or ‘Xero’, factor in making the move early, so you are not firefighting come the end of the quarterly reporting period. A bit of back office planning now, could take the heat off next year when you need to be focused on building sales revenue.
Using accounting software can have its benefits. It can give you a good snapshot of your franchise’s performance at the touch of a button and having a clear, instant view of the numbers will in-turn make planning and decision making more straight-forward in future.
Consider the other aspects of 2020 that might affect your business both positively and negatively too. For example, there is Tokyo happening in the summer which may offer a few ‘sports’ themed style promotions but be careful not to infringe any of the strict copyright regulations surrounding the games. There may also be more locally based events which your franchise could become involved in.
Brexit is a bit of an unknown quantity but whatever happens, it will likely have an influence consumer spending and therefore affect businesses, so taking this into account in your planning would be worthwhile. Is there a way you can streamline your franchise, put in some extra cost controls or strengthen relationships with suppliers which might help weather any storm the economy throws at us?
Now would be a good time to get some input from external advisors. They may have valuable ideas on optimising your franchise performance further. I’m always surprised what some of our d&t business planning experts come up with! They regularly talk to clients about tax planning, VAT exemption, research and development tax rebates just to name a few! A fresh look and a small idea can sometimes, make a big difference.
The other day I noticed a franchise manual that had been put together over 10 years ago was still advising new franchisees to purchase computers with 512KB of memory and storage space of only 128gb! These days, that’s around one tenth of what is needed as a minimum! In this way, attention to detail and making sure documentation is right up to date can influence the productivity of new franchisees coming on board.
We don’t know what 2020 will hold for franchised businesses. However, with a workable plan you can ensure your franchise is as agile and prepared as possible to cope with whatever the future holds. Plan your work and work your plan! Good luck!
For further information or to arrange an informal chat about business planning or Making Tax Digital please see: https:/www.team-dt.com/
