Keep focussing on revenue. I know it’s business 101 – but it’s not always easy, is it?
As a business leader you wear multiple hats. Shifting attention between operational issues, staff concerns, marketing projects, and most important, customer queries, can mean it’s easy to lose sight of fundamental business issues. One of those is always revenues.
That’s true in my chosen business sector of homecare, because without healthy revenues coming in, we can’t maintain a high-quality service. But it’s true for every franchise, regardless of sector.
Healthy revenues enable quality services
I know the importance of maintaining good levels of revenue is not often mentioned in the homecare sector, because care providers don’t want to look as though they are just in it for the money – which they are not. (There are far easier ways to make money fast than getting into homecare – but very few businesses are more rewarding, demand is high and the long-term prospects are excellent.)
The fact is that you can’t maintain high levels of client service, whatever your franchise sector, without healthy levels of revenue. High quality customer service costs money, so you need to keep your eye on revenues all the time.
Tools that can help
Creating a few basic business tools for your franchisees and the franchise as a whole can help keep everyone’s eye on the ball.
- Focus on revenue when deciding to accept new business. Calculate from the outset the minimum clients need to pay in order for the business to make a reasonable profit. Pass this figure on to your franchisees. Obviously the figure will vary for individual franchises, and it’s up to the franchisee to calculate exactly how much they need to charge, but a general figure calculated by head office offers them an example of how it can be done.
- Work out the level of gross profit you need to cover business costs and tax, and work back from that to calculate the net profit required to run the business and pay everyone fairly.
- Use data gathered from franchisees to calculate which activities most increase their revenues, and feed the results back to them. This allows them to use the information as a tool to set their priorities. That means they waste less time on activities that are proven to have little positive impact on revenue.
- Record all these figures, to be compared and analysed regularly, for the franchise as a whole and for each individual franchisee. Once everyone knows what targets they have to hit to make enough money to pay the business bills and deliver a decent service to customers at a fair cost, you can all work together to boost revenues.
Technology will help
Use technology to help create a system that records and monitors these figures. Make the system available to all franchisees, while stressing that although the business remains in their hands, this tool will mean it’s easier to make business decisions and ensure revenue is maintained.
