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Archive for category Franchisees

On the edge…

Oct 27

Posted by Steve Gray in Excellence!, Franchisees, Innovation and Creativity, Leadership, Planning, Risk Management | No Comments

When tough times strike my heart goes out to those businesses on the edge, and of course instead of talking about daily things that can trip up a marginal business, we are now talking about bigger fundamental global meltdown type trip ups.

So when the going gets tough how many of the businesses on the edge have a debt reserve fund, or a plan b, or an innovative structure, system, marketing plan etc to get them out of the jam? probably too few. Then on the business front, if they are a “want” type of business do they have their fingers in the pie of a “needs based” business to be able to handle the changing spend patterns of consumers… probably not.

Here’s 8 quick points to give you the edge in tough times.

  1. Have a plan A, then have a plan B, just in case!
  2. Have some reserves, stuff happens so be ready for downturns.
  3. Needs based V’s Want based, if you sell gifts for example, you might want to look at developing a needs based business to complement it, this way you cover your butt when customers walk away from the niceties. Consider diversifying into an online business of some kind that is easy to manage from your want based business, get busy while it’s quiet.
  4. Keep marketing, but make sure it’s making you money, don’t throw money out and get NOTHING back, measure it carefully, get smart about how it works.
  5. Keep the team informed, fear can run deep and fast, let them know what you are doing or plan to do to weather the storm. Batten down the hatches but make sure they know where the exits are…
  6. Lead, now more than ever the team needs you, teach them GREAT customer service, if people get picky  you need to have the BEST people upfront, with the BEST service, now more than ever. Get out on the floor and look for gaps, are they smiling, are they happy, do they know the products and or services inside and out? No? train them…
  7. Be nimble, change is a given so learn to love it, zig when the others lag or zag. This way you can be there when the others have fallen by the wayside.
  8. Improve your systems, now is a great time to tighten up on how things tick over, ask hard questions like “Are we doing things the best way?” “How can I jump start and or utilise my peoples collective intelligence to give us a lasting edge?”

You get the idea, make a difference, a poisitive difference so your business can take on the challenges tough times provide and see it through successfully. So jump up to the whiteboard and make a start NOW!

It’s risky, get over it and move on…

Sep 23

Posted by Steve Gray in Finance, Franchisees, Planning, Risk Management, Starting out in business, The Board Room | No Comments

I have seen a range of TV current affairs shows recently pointing out businesses (reasonable sized ones on occasions), going under and taking investors with them. If you invest in a business it is risky, any sort of business (and I don’t care what glossy brochure or figures they show you…)

So there are risks involved and you can lose money, you can also gain $$ to, and of course that’s generally the aim for an investment. Look I feel sorry, deeply sorry for anyone that loses hard earned cash in a business deal of some kind, and perhaps there should be a leaflet that people have to hand out in any transaction that may involve risk to explain there may be a risk.

The thing is let the buyer beware (Caveat Emptor) but also understand that people are losing day in day out, and the opposite is also true! In a capitalist society like ours the aim therefore is to have more wins than loses.

So guys, harden up, the road ahead is loaded with potholes and challenges, don’t get angry, get smart and find better ways of evaluating a deal or investment in terms you can understand.

Who’s responsible?

Aug 29

Posted by Steve Gray in Excellence!, Franchisees, Franchising, Planning, Risk Management, Starting out in business | No Comments

In the “topsy turvy” world of franchise contracts, agreements etc, (which many franchisees have little understanding of) it’s painfully obvious that many of these documents ask the franchisee to jump through hoops, but how about working things the other way?

Over time the franchisor will build a “watertight contract” and expect the franchisee to know a lot of things about business and how to get results, but if the result in the business for the franchisee is less than spectacular, where is the “Duty Of Care” by the franchisor in all of this. It’s far too easy for them to throw their hands in the air and say things like “You knew what you were getting into” or “You had the disclosure documents…” “You had the info” and a whole list of other statements/excuses.

When a franchisee is experiencing challenges (not enough customers, not enough turnover, not enough full stop!) then the franchisor says “Well ask us for help” So some do, they drop their pride and call for help. Often the answers given relate to “Put more into your local area marketing” Hello! if I am down the “tubes” and have less cash, how can I put in to make things “better”.

I figure the franchisor should establish a “Duty Of Care” policy and or procedure for the good of the franchise, and the good of the franchise industry. In fact the duty of care policy should state. (For example) That a franchisee must keep a reserve float of emergency cash (in a bank account) that ensures they are able to pull out some extra to make things go “voom”, and over time add to that so it grows to cope with inflation etc.

I also figure they should be held accountable for the marketing… If they put an advert in a publication, was it designed by a marketing expert or the copy room at the local paper…? Then making sure the results are clearly and effectively measured so you can know how well the marketing $$ are spent and you are definitely getting a respectable return on the investment.

If the franchisor is working at building a robust organisation that can provide an effective system for the franchisee, then they need to make sure the people investing in the business are developing their business and financial accumen as well. Okay some have an annual conference, the people go and have a great time, but how many put the information into action? Is their “area supervisor” following up on that? Are their business plans reflecting that development? In many cases no.

Watch out for more “Duty of Care” observations, as they arise and franchisees become savvy to the idea and franchisors get caught out.

So far it’s a one way street with the contracts, but a savvy organisation will ensure they provide avenues to ensure a franchisees ongoing success and what a selling point that will be.

Did you have enough cash?

Jul 4

Posted by Steve Gray in Finance, Franchisees, Planning, Risk Management, Starting out in business, The Marketing Dept | No Comments

When yo got started in business you probably didn’t figure on how much it would cost to get started, I guess no one really knows until they have done it. and for so many people in business they find they just don’e have enough to really cover their marketing costs to get a decent response.

There is an old saying that I think came out of the dot com crash… “Want to make a cool million in IT? Start with 2 million and wait 12 months…”

But seriously if you want your business to have its best chance of being seen, being heard, or just plain known…  then learn more about marketing so your business idea can reach more people than just  your family and friends.

When it gets quiet… you???

Jun 25

Posted by Steve Gray in Chill out!, Excellence!, Franchisees, Planning, Risk Management | No Comments

So what do you do when things get quiet in the business?

Do you…

- Wonder why?
- Start to do all the little things that you mean to do when you are busy?
- Start marketing?
- Sack some staff!?
- Sit and wait…
- Check how things were this time last year?
- Ask what’s happening?
- PANIC!
- Change things?
- Go back to the business plan?

Or a combo of the above…

Whatever you do when things go quiet make sure you do SOMETHING other than panic, as that usually leads nowhere fast.

Do you want business success?

Jun 12

Posted by Steve Gray in Franchisees, People!, Personal Development, Starting out in business | 1 Comment

Getting started in business is one thing, gaining success is another. Many of us will have seen and heard of people who have failed in business even though they felt they had a great business idea and the finances to put behind it to get started… So what went so wrong that it failed?

Lets look firstly at one possible factor, it is said that about 10% of society is motivated to achieve, and of that about 3 % are probably the ones with enough active risk taking motivation or drive to actually get started and see the business through to fruition.

So if you take 100 people and only 3% have the drive or motivation to be able to pull it off, then what happens next?

Out of that possible 3% there may be those that blindly go forth and try being in business and will flog it like a dead horse to try and get a result, even when all the money is gone or vanishing fast.

I guess it’s a time when the emotion of going into business takes over from the logic of it, and before long if there is no “balancer” the person starting the business can run off the rails with ease. Indeed the balancer may well be a person that “holds the purse strings”, figures out the budgets and projects forward when money can be spent.

The “business achiever” on the other hand will still come up with ideas and use their energy and enthusiasm to forge forward, but now within some reasonable constraints.

I figure without the emotional side being constrained by the logical side, all hell can break loose.

So here’s to better business, know your limitations, and balance things out, your long term success might well count on it!

I’m thinking about going into business, should I?

May 29

Posted by Steve Gray in Finance, Franchisees, Personal Development, Planning, Risk Management, Starting out in business | No Comments

A friend and I were chatting, he is to be made redundant, and after many years in his role with a big multinational he stands to get a good pay out. He’s still got plenty of time as an able bodied worker and wants to work… But.

There have been a number of larger businesses fold up their operations locally and he’s not about to move out of the area. He could invest the money and watch it grow, his wife is still working a fair bit so that could be useful, but he would probably get bored (in fact I know he would…)

Doesn’t take long before his mind turns to business. “Hey Steve what do you recommend? One of those franchises or???” Well it’s like this it depends on what you want to do I thought.

It turns out someone had given him the hint that a franchise could be useful, I set him thinking by asking… “What do you currently earn per hour, and do you think you could earn that in a franchise, especially if there are people being put off work in the area…” It got him thinking.

But the temptation is there, to the untrained eye it could look okay, you get the system, you milk it and the planning side is partially done, the brand image is there? What more could you want? In all honesty a LOT more.

And here is where most people seem to go astray, they get emotionally wound up in the idea “Be my own boss? YEAH!” and the rest they say is history… It’s all very well for me to say “Go do your homework…” But what if you don’t know what to REALLY research?

So the short answer is to ask lots of questions, check out lots of options, and get savvy on the language, biz speak can be daunting for those not in the know.

In any business there are risks, so before you commit your funds find as many people as you can in that field then ask them lots of questions. In fact I suggest you get to more than 10 in any one group, and then more in other groups as well.

So do the due diligence, and make sure the full on emotional satisfaction you feel in the beginning is something that will last well into the future, just in case things go “belly up”.

Watch where you step…

Mar 7

Posted by Steve Gray in Franchisees | No Comments

Another franchise buying tip for the non business person.

You are excited about the business you are looking at and in most cases you have gone out on a limb  and “emotionally bought in” to the business and no matter what someone tells you, you are going to buy it. BUT to be sure you have made sure and made an appointment with the franchise groups marketing and sales dept and want to find out more.

In essence  you have already bought and the more details you seek from the company (who’s main interest is to sell you a franchise) the more they know you are interested. However the smart person will take this step and make it just another part of their research… but watch out for the things that some people would say are sneaky habits the sales crew might use.

- There are limited opportunities – We are selling x No of territories per week, so don’t miss out. This is often true but how long has the territory you are after been on the market? is it a resale and if so why? Get in touch with the previous owner and hammer them for info, the real info not the trumped up “Oh I have a back injury and can’t continue…” ask about the turnover, the profits, and the customers perhaps even the staff they had or still have etc.

- A good operator can make a real go of this franchise – Then ask them to define a good operator, if its a person that works 16 hours per day, 7 days a week then you might need to rethink things. Call up existing franchisees and see what sort of commitment they are putting in and the payola for that.

- Your time is your own – Sure you might have time flexibility but at what cost? If you take a day off to go to kids functions, performances etc will the income drop for the time you are not there (especially if you are a one person franchise).

- We support and train you – Okay what sort of support do they really give, ask the other franchisees when you do your research… find out how they practically put in to make your business be all it can be. Do they hep your with business plans, do they review business plans? and the list goes on.

- It’s a great lifestyle choice, you can be your own boss! – So what’s the advantage in that? Often it means more headaches than just working for someone else. Start asking people in business about being a boss and what that might really mean to you.

These are just a few, but I  hope it helps  you to “see through” the surface information to find the real  meat in the sandwich, not just the fillers.

Watch your language!

Mar 5

Posted by Steve Gray in Franchisees | No Comments

If  you are out to buy a franchise watch out for this trick designed to lure the non business person into their lair…

- Income guarantee -

You currently have an income with a job, you get $$ to take home and spend… that’s the usual definition of income, but in business circles this can be used to have you thinking that, but in fact  you get income that you then have to pay the costs of doing business out of. In fact it should be stated that it’s a turnover guarantee, then once the costs have come out you are left with some $$ (if you are lucky!) and then you can take your income out of that.

The lesson know your business terminology, get a glossary of business terms and make sure you  have a solid understanding of this important area so you can talk turkey and not feel like one!

So you are in business… Are you making any $$?

Feb 12

Posted by Steve Gray in Finance, Franchisees, Growth, Planning, Risk Management | 2 Comments

You have the business set up and things are running ok. You handle customers well, you pay the staff, you keep things ship shape in the bookkeeping area, all seems well, but are you making any money, real money, real income?

In the scheme of things those that have gone from an employee to a business operator will no doubt note there is a big difference between turning up and getting paid and turning up and wishing for more customers, the hassles to stop, and the seemingly endless challenges that creep up and take you by surprise.

Lets do a basic sum here, if you were on $700 a week income (take home) in a job, you had few hassles, in fact you got paid if you were sick, or on holidays… Now as a business owner you are the boss and you only get holidays if your business earns enough, if you trust the staff to run things while you are away etc… the list probably goes on AND ON!

In your business you need to be able to take into account a range of things to ensure viability, the cost of overheads, materials, marketing and so on, then have a margin on top of that to cover wages… then a profit (remember to pay yourself from the wages area!)

So the way forward is to project the cash-flow for your business and see if the amount you have to earn per day is do-able, and not outside your threshold for earning… As an example, if you are used to earning $700 per week, imagine how it might be if you have to turn over $700 in two days, just to make ends meet. For some that trips their mental threshold on money and they fail fast in the business stakes due simply to this psychological hurdle.

Once you establish the cash-flow for the business and how it fits with your money threshold, then ask are other businesses in this industry area able to do that with ease… or is it a struggle?

Answering the vital questions on cash-flow will either open a “Pandora’s box” of issues and hassles, or show the way to prosperity from being in business.

Here’s a tip, if you are currently employed and are thinking about going into business on your own, take a few days leave and check out what similar business types do… if it’s a retail store do some serious spying on them to see how many customers walk in the door, and at what time. Then check out their marketing, is it enough? Is there too much competition? Or is there scope for a new player in the game to take the lead and give it a good shot.

So if you go into business and take the inherent risks that go with that notion, consider the above points carefully, otherwise you may find you will work flat out and get nowhere fast, in fact it may cost you a great deal more than the initial investment.

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