By: Mike Kriesman | Chief Technology Officer
Small business ownership often means owning and operating a franchise. There are many advantages to pursuing ownership of a business by becoming part of an already well-known company. However, there are also special considerations for truly succeeding as part of a franchise, including honoring the values and culture of your parent company. Keep your business growing by taking full advantage of the great benefits of being part of a franchise.
Here are 5 tips for franchise success.
Find the Right Franchise
From the very first moment you consider becoming a franchisee, you will need passion and enthusiasm for the business you are about to launch. Buying into a franchise is a huge commitment. Be sure you truly love the products and services you will provide as part of the organization.
Look carefully at the needs of your area. A new business should always respond to a need or demand in the location where it is based. If your area already has several similar businesses, think carefully about how much room there is for competition in the market. If your area is already well-served, jumping into an already saturated market will be much more difficult.
Reach out to current franchisees and ask detailed questions about their experience as part of the company. Buying into a franchise requires following the company’s rules, so researching how business owners working inside the system feel can offer a useful perspective on day-to-day operations.
Take Advantage of Existing Business Systems
Many small business owners choose to become franchisees because becoming part of an established organization means taking advantage of existing operational systems. This means that instead of inventing everything from the ground up, a business owner can be assured of product consistency, leadership, established human resources routines, and sales support including marketing and promotional materials.
A smart franchise owner knows how to make the most of the established rules and operations to run their business smoothly. Buying into a franchise also means buying into the values and vision of the company. As industry leader Jose Costa notes, that should also earn the franchise owner “insight into what works in the industry” and guidelines to become profitable without experimentation.1 In other words, franchisees should work hard to get the most out of their company’s expertise. It is a huge part of what they bought into as part of the company.
Location, Location, Location
It is one of the oldest rules in business - location, location, location. This is just as true for a franchise as it is for any other business. You can gather a lot of demographic information from free resources around the Internet, including free reports from the Small Business Administration (SBA) and the Small Business Development Center Network (SBDC).2 These reports include competition maps, market reports, and drive time maps. You will need to contact your local SBDC office to get started. Find your local office HERE.
National franchises also use geographic-information-systems software to deeply analyze customer data and population information for every corner of the country.3 Finding a high-traffic area with the right customers is fundamental to success. Consider parking and nearby retail venues when looking for the perfect location.
Great Employees Providing the Best Service
Franchise owners have guidelines to follow when hiring, but finding and hiring the right employees is still critical to this type of small business ownership. Getting and keeping the best people to work at your franchise is an important part of your success. Look for candidates that are friendly, professional, and willing to work as part of a team. Check out these links if you need advice regarding recruiting, interviewing, and hiring.
Once you have a great team, emphasize the importance of excellent customer service. Small business success is built upon customer loyalty, and your team will be an important part of getting customers to return. Consistent training and prioritizing an exceptional customer experience should motivate your team to keep customers happy. Many franchisees use formal and/or informal rewards to motivate their teams. Rewards can be simple, such as a cash bonus for everyone working during a successful mystery shop, or more formal, such as a monthly incentive for managers who meet sales goals while managing costs.
Stay in Touch with Other Franchisees
One huge benefit of franchise ownership is your network of fellow franchisees. Staying in touch with other owners within your franchise keeps you aware of company policy, new products, challenges that might need to be addressed, and opportunities provided by the company including formal training programs. In other words, the whole network of franchise owners can work together to improve performance and profitability.
Furthermore, having an already established network of peers is an amazing resource for social and emotional support. While many independent business owners often experience isolation or the burden of carrying all the responsibility of running a business, franchise owners can turn to other experienced franchisees for advice and support.
While the culture of a franchise might reflect the larger company, the business needs of a franchisee are much the same as an independent business owner. Jet Capital is here for small business owners, including those who own a franchise.
Jet Capital provides fast, flexible on-demand funding for small businesses. Contact us today to learn more about merchant advance funding as an alternative to a small business loan.
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