The 5 Spokes of Every Franchise Business
Create growth strategies for your franchise by focusing on five key areas: Leadership, Finance, Operation, Marketing and Technology.
When I evaluate a franchise organization, we always use a hub and spoke model as a focusing tool. This is applicable for any business model and allows us to break the business down into manageable categories or departments. We can then create a game plan for growth within each area.
Think of your business as the center or the hub. The five spokes break down into Leadership, Finance, Operations, Marketing and Technology.
Leadership is the most important controllable factor in any franchise business. I have seen great business models fail due to weak leadership. On the other hand, I have seen many basic businesses thrive due to great leadership. Every business that has a team, staff, employees and customers (which is almost all of them) needs to have a clear leadership development plan. Try these tips:
- Begin with a basic leadership organizational chart (org chart) and job descriptions for your existing team. This will give you clarity of roles and responsibilities and identify the gaps you may need to fill.
- Utilize technology tools to make sure that your core leadership systems are being implemented RELIGOUSLY. These are the behaviors that keep your business growing in a positive direction and need to be practiced consistently over the life of your business. Websites and mobile applications are now available to help automate these processes.
- Get third party coaching and support. Many business owners have told me that they don’t know what they don’t know. This reality causes many businesses to stagnate. There are now many coaching options, websites and books for franchise operators.
Finance is the backbone of a business. It has been said that it is not how much you make but how much you spend that matters most when it comes to a profitable business. I have seen businesses bring in over a million dollars a year only to lose money due to out of control costs or spending. That is a lot of work for a loss.
Implement these finance strategy tips for your business:
- Back to the basics: start by making sure that you have the standards in place including a cloud-based accounting software, regular financial statements and a working budget.
- Keep a basic business plan with projections. Even if you are not seeking partners, investors or funding, a business plan is a strong focus and forecasting tool. This is a game plan for your business that will help you keep your business moving forward.
- Use technology tools such as budgeting and forecasting platforms, and incorporate your financial goals so you can keep track of progress.
Every business has a unique set of operational elements. For instance, a retail brick and mortar business will have standard opening and closing procedures whereas a mobile business does not. Franchisors will create a standard operations manual that serves as the owner’s manual for a franchised business. Whether you have a very structured business such as a franchise, or one with less operational structure, you can apply some tips to increase your efficiencies:
- Use technology tools such as an online operations manual and training platforms to increase team participation. These platforms should be mobile-friendly for ease of use by workers on the job.
- Be sure you have a current operations manual for your business at all times. This manual is to be used as a training reference, legal policy document as well as your business “how to” guide.
Marketing is the biggest challenge in business. This has become more evident as technology has become part of the marketing mix. Technology has created many wonderful tools for business marketing but has also created a great deal of confusion to many operators who now have a whole new world to learn about. For example, many years ago, a local accountant would use mailers, newsletters and print advertisements in local papers to market their business. Today, the same business owner must have a robust website, social media and maybe a mobile app just to stay competitive. Try these marketing tips to increase your sales:
- Create and maintain a comprehensive marketing plan. This plan should include all six marketing pillars from Franchise Bible, 8th Edition for the highest return on investment.
- Don’t forget the basics. Think back to the core reasons people use your business. Build relationships with your customers, and keep doing the things that work.
Technology has now become a standard element of every business. As I mentioned in the accountant example above, this has added a new world for business owners to not only learn about, but to use and invest in, which can be very intimidating. The good news is the fact that the cost for technology tends to come down over time so you should be able to find affordable solutions for your business. Try these tips:
- Due diligence is the key to saving valuable money and time. Don’t just settle for the first tech solution that you find. You can easily search online to compare options for just about anything today.
- Don’t over do it with technology. Many business owners have spent money unnecessarily because they thought they had to keep up. Just stick to your core business and only use tech if it helps you make more money or spend less.
- Hire a technology consultant to help you narrow the field of choices and ensure successful implementation.
These tips can help you improve the efficiencies of your franchise business. Think of your business spokes like a solid exercise program. The more consistent you and your team are at the implementation of your systems, the more profitable your business will become.