2023 is set to be another challenging year, with inflation, higher interest rates and a shortage of workers across a range of industry sectors. In many ways though, franchising is well placed to weather these storms, due to a number of reasons:
- Many franchisors have operated through a number of previous recessions, so although it may be new to some franchisees, there is experience to call on to help them through.
- Being part of a franchise network means that you get the opportunity to share best practice and help each other with ideas and strategies to overcome difficulties you are all facing.
- And there really is strength in numbers. The network buying power is so much stronger than if you were a small business owner operating alone and the banks may be more supportive as they have a history with the brand and understand the strength of the proposition.
So rather than focus on the negatives which can affect the business, let’s look at some ways you can start the New Year with a positive approach and get your franchise business in good shape.
Whether you are a franchisor, a franchisee or you are planning the right franchise to buy or the right time to launch, there are some things that we should all be considering as we head for another turbulent year in 2023.
Keep an eye on the cash!
Effective cashflow management begins with minimising cost and this is something you can do whatever the size of your business. It is also something to keep an eye on before you even start your franchise journey, get your personal finances in good shape too. Only buy what you need and bargain hard with suppliers. Ensure any invoices are sent out promptly and chase as soon as they are due. Consider offering discounts for early payment, get that cash into your account early. You can request deposits on order or cash on delivery for higher-value sales. Get into the cashflow forecasting habit. It can help you identify potential cashflow issues in advance and act to avoid them.
Win new customers
Inevitably you will lose customers from time to time, often through no fault of your own. So even if you just want to remain where you are now, you must win new ones, and that requires investing time, effort and usually money. But you also need to stay close to your existing customers and keep them happy if they are going to stay with you. If possible, find ways to sell more to your existing customers.
Delight your customers
Once you have won a new customer, it makes sense to try and keep them! Really focus on the customer experience that you and your team deliver, to make sure your customers are happy. Ask them to give you reviews and recommendations, as that can be a key part of gaining new customers.
Look after your team
If you have staff, they will be at the front-line delivering customer service so if they don’t feel valued, they won’t be providing the best customer experience. Plus, in these days of staff shortages, why risk losing good staff? Make the effort to nurture and develop them, show them that you value their work and skills and build a tight team you can rely on.
Revisit your business plan
If you don’t have a plan, how will you know whether you are on course to succeed? It doesn’t need to be War and Peace but a well thought out, regularly updated business plan can keep you focused on your development strategy and key business goals. And while you’re at it, why not revamp your marketing plan, with a strong focus on how you will reach your potential customers and remind your existing ones about your service.
Work more on your business — and less in it
Allowing yourself to get bogged down in the daily demands of running your business is a common mistake, but it can mean your business fails to develop. Try to make regular time when you can step back from the daily grind to focus on the bigger picture.
We can’t always do anything about some of the external challenges that come up without warning, but what we can do is ensure we focus on the things that we CAN affect.
Business owners who focus strongly on cash, customers and staff, will give themselves the best chance of success, whatever the external economic environment!