Let’s not beat around the bush, 2023 has been a challenging year for so many. Cost of living crisis, multiple military conflicts, and seemingly constant political turmoil across the globe. It is easy for us to be completely consumed by the doom and gloom that is doing the rounds, but, if we lift the lid on the state of play, I believe there are paths emerging through the chaos.
Firstly, it is worth summarising the state of play of what I believe are the 3 key pillars that bear influence on how we do business.
Politics
Whether we like it or not our political environment has a direct bearing on our sector. After years of dysfunctional chaos, my sense is the grown-ups are now in charge. My fear is it has been too little, too late. The incumbent government have inherited a poisoned chalice. It is difficult to find many who do not expect a change of Government in 2024 and the reality is, for all the grandstanding of change, the next government have little room for manoeuvre economically. The fact is the fiscal belt will remain tight for the foreseeable future. The stark reality is, we need to take responsibility for ourselves, our businesses and our sector to make the changes we seek.
Economy
Going hand in hand with the political landscape, all the signs are little will change in 2024 economically. There is some good news. Inflation will continue to fall, most of Europe has sizable energy reserves in the form of long-term gas storage and real wages, adjusted for inflation, is now positive, meaning ordinary workers are seeing increases in spending power. However, the big elephant in the room is the general level of taxation. Without any credible long-term strategy to invest in UK growth, it is difficult to see in the near term how the UK is going to escape the vicious circle of maintaining current level of public sector spending without increasing taxation, let alone decrease it.
Like so much in life there are two sides to the coin, a positive and negative, a Ying and a Yang. Whilst some are struggling economically, plenty are not. Take the UKs rampant housing market and tougher interest rates. Horrendous if you are first time buyer and a huge social issue. If you are a long-standing homeowner with little to no debt, happy days. You have made substantial amounts in asset gains and your cost of living is likely to be below average. This in turn means there are millions of older members of our society who are comparatively asset rich, have high disposable income and limited economic dependents. If you can find a way to tap into this market, it has the potential to be highly lucrative.
Innovation
Artificial intelligence undoubtably is the next major industrial revolution and holds exciting potential for a step change in economic productivity. However, for all the huff and puff it is still a young technology that will iterate considerably whilst it finds it feet.
Any fans of the Dunning-Kruger effect, which says those that know little tend to think more highly of their contribution on a topic, will struggle to find a better example than the avalanche of clueless commentors in this space.
The bucket of ice-cold water moment is this: whether we like it or not Franchising, in general, is technologically in the Ice Age. We are a long way behind. Before we even contemplate new technologies such as AI, we need to get the basic foundations right first.
But and this is a huge but, the fact we have achieved what we have whilst being so lacking in this department, is a huge opportunity for brands. The remedy is simple, we observe other markets and sectors that are ahead of us, critically analyse the success and failures and apply this to our respective businesses. We don’t have to be the genuine pigs. This makes the path to economic improvement significantly easier and more impactful than it would ordinarily be. It is our unfair advantage and I passionately believe this is one of the first areas brands should be looking to leverage.
The Path
I am optimistic about 2024.
Not because I think the economic landscape is going to be much different, but because our sector has a number of aspects that enable us to engineer business growth.
Our general lack of technological sophistication means there are some massive untapped gains that are comparatively easy to unlock. Speaking purely from my FranScape perspective, the average growth rate in network sales of any of our clients is 38% within 12 months, simply by nailing the customer experience and providing a flow of data that enables smarter decision making.
I predict more members of the public will realise the onus is on them to create the life they want. This will lead more people to consider starting a business and as the BFA and other organisations continue their excellent work on raising awareness of this great sector, I expect interest in Franchising to grow.
The final piece for me is I believe we should play to our strengths. Our community. Franchising is special in so many ways, but the sense of comradery and collective support is truly unique. Don’t be afraid to get in touch with one other, share stories, I promise you won’t regret it.
Finally, this leads to my personal 2024 Action Plan
- Expect the unexpected – keep reserves be that financial, intellectual and personal resilience
- We are stronger together – how many species in the natural world travel in groups for collect protection? A lot. Fostering positive relationships with peers and key people of influence that matter to you can only be a good thing
- Think laterally – the solution to a challenge will almost certainly be radical, embrace innovative thinking, be bold and courageous
