11 minute read
5 SKILLS THAT LEAD TO SUCCESS
4 SKILLS THAT LEAD TO SUCCESS
What skill sets will help you achieve goals in your franchise?
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By Kate Groom
Despite what some people think, owning a franchise isn’t as simple as ‘Add water and Mix’. To be the owner and operator of a franchise you need skills beyond what’s taught in your induction training.
Here are four business skills that will serve you well. You might already have them before you start in your franchise, but if not you can learn as you go.
1. SALES
If you want to succeed in a franchise you must develop the ability to sell. Whatever your business trades in–from courier services and cafes to physiotherapy–nothing happens until you make a sale.
Years ago I met a franchisee who was so terrified of talking with people that he couldn’t make sales calls. Despite his enthusiasm for the business – and the training he had received – he simply couldn’t do sales.
So, when you’re assessing your ability to succeed in a franchise, it’s important to work out whether you have the personality, confidence and potential to succeed in sales.
You don’t need to be a gun salesperson, as your franchisor should teach the principles of selling for their business model. But you need to have a sense that you can sell.
2. MARKETING
Marketing is different from sales. It’s about getting people to the door, counter or your virtual equivalent. Even if your franchisor has a marketing department, you will still need to do local marketing. Actively promoting your business can be the difference between average and exceptional performance.
It’s quite likely that you won’t have much experience in marketing (unless your current job is in that field). However, your franchise is more likely to go well if you’re the kind of person who sees opportunity to promote a business. Even if you have absolutely no marketing experience, right at the start you should ask yourself “Do I have an interest in promoting my business and learning more about how to market in my local area?”
3. LISTENING
Listening is one of the most important skills of a business owner. You need to listen to customers, staff and advisers. And we mean listening to understand what they are saying, not just letting the words wash over you. Listening skills will help you avoid errors and misunderstandings, and a good listener is always valued.
One of the best ways to become better at listening is to give the other person your whole attention. That means not multi-tasking!
4. PROBLEM SOLVING
In your business you will spend a lot of time solving problems, whether that’s how to use new software or an app, or figuring out the roster for a busy time of year. Or you might have a crisis to deal with.
Problem solving skills are what we use when we are doing something for the first time. You don’t have an instruction manual – you just have to work it out. This doesn’t mean doing everything yourself though. Sometimes the best way to solve a problem is to contact an expert. Still, there will be many times when you are best placed to be the problem solver.
While you’re thinking about buying a franchise you can also consider your ability to solve problems. What tricky situations have you encountered? How did you resolve them? Do you enjoy this or are you not so keen about being out of your depth?
Each of these business skills will help you succeed in a franchise. Even before you own a business it’s worth reflecting on your strengths and areas you could improve. This will help you make an informed decision about the business opportunity and your ability to succeed in it. n
Kate Groom has a background in economics, accounting and franchise management and helps franchisees make better use of planning, communication and technology to improve business management.
WAYS A FRANCHISE HELPS WITH YOUR HR 5
Invest in a franchise and tap into advice that can help you deal with some of the trickiest elements of business ownership.
When you buy a franchise you will effectively be running a small business and that means chasing key priorities such as cash flow, sales, inventory and customers. Within this, HR is often left low on the priority list, though the importance of getting it right is quickly recognised.
The good news is a franchise can provide support in managing some key HR requirements so you have less to figure out on your own.
Here are five ways in which owning a franchise can help with your HR.
1. EMPLOYMENT CONTRACTS Navigating through employment awards and contracts can be tricky and time
MEENA SILK
The HR Dept Fremantle Cockburn WA
consuming. Franchisors often provide a standard set of employment contracts, reducing the amount of work required researching, drafting and setting them up. These contracts are usually legally compliant and secure employer and employee interest in a fair and equitable manner.
2. HR METHODS, POLICIES AND PROCEDURES What do small business operators do when they are faced with complex HR issues? They rely on the internet for answers. Unsurprisingly, this is a recipe for disaster due to the wide range of unverified or outdated information collected. Owning a franchise can come with access to important HR policies, procedures and systems. This helps significantly in managing compliance requirements in addition to removing the need to build essential tools such as social media policy, privacy and confidentiality, bullying and harassment policies and other business-specific policies.
3. ABILITY TO ATTRACT SUITABLE TALENT One of the biggest challenges for small businesses is the ability to attract suitable employees. Potential employees prefer to work for established and recognisable brand names, as opposed to stand-alone businesses or lesser known brands. This can significantly increase the available pool of people to recruit from and can help retain the right employees for longer compared to non-franchise businesses.
4. STREAMLINED PAYROLL Setting up payroll is often faster and easier in a franchise, simply because it has been done before within the network. Franchisors also assist by providing or recommending the appropriate software for managing payroll and setting it up correctly to suit the industry needs and relevant employment award.
5. POWER OF THE NETWORK If you are faced with an unusual employee issue or a tricky situation, chances are someone else within the franchisee network has dealt with something similar before.
Some franchisors may also have nominated HR advisors who can help with everyday people matters and give the franchisee confidence to deal with
their employees.
Additionally, franchisees are kept up-to-date with relevant employment law changes, minimum wage increases, etc.
HR TOOLS Many franchisors provide HR assistance as a risk management strategy that benefits both the franchisee and franchisor alike. The value of this is immense – from lower cost of setting up HR to having access to tried and tested systems and practices.
While these do not replace the time it takes to effectively manage people, the tools and infrastructure help greatly in setting up your business for HR success. n
MAKE THAT BUSINESS DREAM A REALITY!
Asking the right questions is key before you dive into the rewarding world of franchising.
KAREN MATTHEWS
Business reinvention specialist
Does this sound familiar? “I am going to start my own business, be my own boss, not get caught in corporate politics, reap the benefits of my hard work, work my own hours and have an overseas holiday every year … ”
This is all absolutely possible and definitely some of the wonderful aspects of franchising. However, after establishing Ella Baché’s franchise system and 10 years as CEO running Ella Baché, there are a number of well-worn paths and tips that I would like to share with any budding and even existing franchisees.
PASSION IS NOT ENOUGH A love of the industry simply is not enough. You need to question, question, question. Many people become interested in a particular franchise opportunity because they have loved it as a customer or maybe their parents ran a successful business. You absolutely need to have a passion for the business you are considering but there is so much more to the purchase decision.
Interview other franchisees – established and new, and members of the business’ franchise council.
TRUTH-REVEALING QUESTIONS • How long has the franchise been operating? • How much information is openly disclosed? • Are all the franchise fees, and the services you will receive, clearly articulated? • Is the franchisor happy to share the performance of a variety of existing businesses – established, new, large, small, country, metro? • Exactly what weekly/monthly support will you get from the franchisor? • What feedback mechanisms are in place within the franchise system? • Ha s there been a history of disputes? • What financials will you be asked for? Tip: if it’s just the standard P&L, balance sheet and cash flow information, this may be a sign that commercial, modelling and decision-making numbers and ratios are not a priority. I believe this is cause to ask more questions!
MONEY REALLY MATTERS
Financial diligence is critical so before you decide to move forward with your investment, you need to delve deeply into the operating financials. You want to see some real profit and loss examples from businesses within the system. So what are the questions you should be asking?
FINANCIAL FUNDAMENTALS • Wh at is the bottom-line profit percentage to sales? • How long on average has it taken a business to break even, and does this vary by location/size of business? • Wh at percentage is wages/salaries to sales? • Wh at percentage is the expense line to sales? • What percentage is rent to sales? You need to also understand some lead indicator financials (i.e. factors that can predict or indicate positive or negative performance in the future): • What is the average spend per customer/client? Has this increased or decreased? • How m any new customers/clients has the business attracted? Is this up or down on the previous period? • If you are considering a retail business, what is the return per square metre of the business and, again, is this number improving? • An other question for retail franchises: what is the productivity per hour for staff and has this improved over time? It is also important to review these businesses at various points in time … look at a start-up as well as an established business because these benchmark ratios will change over time.
WILL YOU SUPPORT ME? The last step of the questioning process is to now understand what the franchisor has in place to support their franchisees in: • Tr acking these indicators. • Ongoing regular benchmark reporting across the system. • Su pport/training/development – weekly, monthly, quarterly to improve these numbers within individual franchisee businesses.
ARE YOU A RULE BREAKER? Great franchise businesses are about franchisors developing a robust and proven system and franchisees paying a franchise fee to follow that system. If you like to break rules and hate following systems, franchising may not be for you.
NIMBLE, FLEXIBLE AND FOCUSED All high-performing franchisees have great accountants behind them managing the books and preparing the necessary financial statements, but the financial focus within the four walls of the operating business needs to be nimble, flexible and focused on both lead and lag indicators. Lead indicators are predictive indicators of future performance, while lag indicators are actual historical performance.
Choosing the right mix of these numbers and monitoring them regularly is critical for decision-making. A practical and commercial approach to the numbers is key to success and not always in the wheelhouse of a traditional accountant.
A SEVEN-STEP CHEAT SHEET In summary, there is a broad process here with lots of questions and diligence required at each stage … 1. Love the industry you are considering – you are going to be engulfed in it, so you need to love it. 2. Look for clear, confident disclosure from potential franchisors – fluffy, vague language is something to be concerned about. 3. Ask for real proof of concept and performance from others in the system. Benchmark your business against similar, high-performing businesses already in the system. 4. Sp eak to other business owners who are already established. 5. Ask the potential franchisor how they will set you up for success and importantly the commercial operating reports you will have and the regular support they will provide you and your team. 6. If in doubt or feeling overwhelmed, reach out for help. 7. Be patient – bank your short-term wins, don’t spend them (that time will come).
Deciding to invest in a franchise is a fantastic opportunity but extreme diligence and insight is critical to ensure you set yourself up for long-term success and those years of overseas holidays you have dreamed of. n
Karen Matthews is a business reinvention specialist, and her career includes marketing at Myer, 10 years as CEO at Ella Baché, and two years as retail director at Freedom Furniture.
