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Why better training for senior managers pays dividends

Written by Chris Roberts on Monday, 06 May 2019. Posted in Finance

Teaching your managers how your company really works and encouraging them to take ownership of their departments will benefit your franchise

Why better training for senior managers pays dividends

As a business grows, the franchisee is likely to need to appoint one or more senior managers to help with the daily running of the company. Unfortunately, it’s not always acknowledged or understood that these senior managers are more likely to provide a better overall contribution to meeting the owner’s business objectives if they have a wider understanding of the company’s goals. This can include being able to grasp the bigger picture as far as the business is concerned and how the business in general works, particularly from a financial point of view. 

Why should you care? Simply because they’ll also outperform themselves if they’re trained to recognise what factors they have influence or control over. This can play a crucial part in the critical areas of the business’s overall cashflow, profitability and value.

Where possible, I believe two things must happen to gain the maximum benefit from the appointment of a manager or a management team – they should buy into your business plan and create their own one for the part of company they’re responsible for.

Let’s start with the first point. Managers must get on board with at least part of the directors' business plan. Assuming this document has a number of objectives and step-by-step strategies for each one, they need to understand this content and the related financial issues. 

The second thing that must happen is that the managers should produce their own business plan for the store, department or division for which they have responsibility. This can then be viewed or tweaked if necessary and finally agreed by the directors or owners of the company. The manager or management team can then regularly measure, for instance on a monthly basis, their financial performance against this and include an analysis of a given number of financial key performance indicators.

Where appropriate they can apply the bigger picture approach and work more closely with their managerial colleagues in other parts of the business to avoid the dangers of working in silos.

There are several benefits to this. For instance, it gives the managers ownership in a significant way and provides the managers with a chance to set their own targets, which are more likely to be accepted and worked towards with positivity.

Moreover, it lends itself to the easier application of a bonus structure that’s related in part to the measurable financial performance of the company. It also provides high level training and development. As your franchise grows it means you essentially tap into a talent pool of home-grown top level management and even additional board members.

Finally, and perhaps most importantly, the company is profoundly more likely to hit its financial targets and overall business objectives.

Therefore, the sensible way forward is to ensure the people who are promoted or brought into these roles are well trained and encouraged to develop their overall business skills and knowledge. Also, it can be a good idea to introduce a suitable remuneration package, probably including a bonus structure, not only for their own department but also with an element that applies to the business’s overall performance. That way, you can get the best performance out of your team. 

About the Author

Chris Roberts

Chris Roberts

Chris Roberts is the co-founder of Franchise Finance, the franchise consultancy with a specialism in all things finance. A regular on the training and speaker circuit, Chris draws on career in banking and his knowledge of franchising to helps clients with everything from how to prepare a business plan to the ins and outs of finding investment.

 

 

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