What does running a successful franchise take?
It is important to understand that running a successful franchise means different things to different people. For some, it means having a business that is profitable and makes money. For others, it might mean developing a business that takes care of every customer's need. It may also mean developing a business that makes its employees wealthy.
Whatever is your interpretation of success, these 10 tips on how to be successful in the franchise business are invaluable.
Choose a business you’re passionate about
The success of a franchise business is determined by the passion, dedication, and commitment that you have as the owner of that business. If you’re not engaged in the business, you can’t expect your staff to be. You must lead from the front and by example.
Research demographics
Franchisees should study their demographic data thoroughly before they start investing in a franchise. It is important for them to predict how this demographic information will affect every aspect of the business from location to advertising and even payroll.
Improve your business skills
A profitable and successful franchise business is founded on the owner’s skills in addition to the skill of the other staff. Continual improvement of your business skills will help you gain a greater understanding of your franchise, improve your relationships with your staff, and help you build on strengths and mitigate weaknesses. From bookkeeping, through human resources, to social media, never stop learning and developing yourself and others.
Follow the franchisor’s system
Running a successful franchise is not an easy task. There are many things to consider before you decide to become a business owner in that type of company. You should know what the requirements are, the obligations, and you should also know how to work with the franchisor to make your business successful.
The franchisor will provide you with all the needed materials, guidelines, and documentation to start your franchise business. In return, you will have to follow their rules and regulations to maintain the brand’s reputation.
Have a business plan
Don’t make the mistake of not having a business plan ─ if you fail to plan, you plan to fail.
A business plan is a roadmap for your future business. It is meant to help you decide how to grow your company, what your long-term goals are, and what you’re going to do to get there. It can be used to approach potential investors, partners, or lenders. It can also be used for keeping employees informed about your business direction.
Make sure you have enough capital
The success of a franchise business depends on many distinct factors, but one of the most important aspects is the availability of cash. Running a successful franchise requires that you have enough cash to follow your plan, especially in the first few months as you are building your business and cash flow is likely to be tough.
The amount of money needed depends on several factors, including the type of franchise, start-up costs, employee costs, marketing, etc.
Hire the right team
Franchises are successful when they have a solid business model on which to build on. However, we all have limits to how much we can do on our own. Without the right help, your chances of success are slim, so hiring the right team is essential for success ─ and building the right team begins before you start looking for the best franchise to own, with the choice of experienced lawyers, accountants, and franchise consultants.
Customer service is key
You must make sure that customer service is your top priority. Customers are always at the heart of a successful franchise. The customer experience should be your focus, not your margins. Why? Satisfied customers are the ones who will be willing to pay you more money and refer their friends and family members to your business ─ and that’s going to help you grow faster than any amount of advertising.
Use your marketing budget mindfully
Remember, you will not have infinite money or resources to throw at marketing, so you should use your marketing budget wisely.
Marketing strategies for any business are usually organized into three phases: awareness, consideration, and conversion. You’ll need to understand your target market and what their problems and needs are. You’ll need to speak to them, and share the benefits of your products and services ─ get them thinking about your business to encourage them to buy from you.
Focus on customer retention
If you can retain customers, it becomes much easier to attract new customers because you have a higher reputation and people trust your brand more. It’s also much cheaper to market your business to existing customers than it is to find new customers.
How to run a successful franchise – The key takeaways
A franchise is a proven business model, but success takes more than choosing the right franchise.
No one is born a business owner. You must learn the ins and outs of managing a business. Being passionate about what you do is crucial to your success, but without proper planning and research, the right team, and the right approach, you may find yourself in a lot of trouble.
Where do you start?
Take our franchise aptitude assessment.