My HMO Journey: No rest for the wicked as we approach...
So your business is successful, you think it’s time to expand and you’re carefully considering your next move. If you recognise this scenario, taking a closer look at franchising could well provide you with the most cost effective and rapid expansion plan. It’s a big step and it’s not right for everyone or even every business model, but profitable franchising could well offer you the solution to the conundrum of ‘how to grow my business’. Your next question is obvious: how do I set up a franchise? Read on for our quick reference guide to ascertain if franchising is right for you and if your business is right for franchising.
Firstly, even if your business is perfect as a franchise model, if you don’t possess the drive or the kind of tenacious personality needed to lead a successful franchise, it won’t work. If you answer ‘yes’ to our four personality traits below, chances are, you will make a successful franchisor.
You’ve already proved you have an entrepreneurial spirit by establishing your successful business in the first place, but does it run deep enough in your veins for you to replicate your business model over and over again and help your franchisees succeed? You will not only have to demonstrate a business acumen which is far more developed than was required to set up your own business, you will need to persuade others, your prospective franchisees, that you and your business is right for them. You want to attract and retain the best and you need to be prepared to apply your business talents to the entire network and not just your own business.
It stands to reason the most successful franchise leader will display exceptional leadership skills. Leading by example is one thing, but you can’t just ‘sell’ your franchise to the first person who comes along and leave them to it, that’s a recipe for failure. You will need to roll up your sleeves and become immersed in your franchisee’s outlets to give them, and ultimately your brand and network, the best chance of success. Like all leaders, you will need to balance your leadership skills with the temptation to wade in and take over, remember, it’s their business just as much as it is yours, they want your guidance, but don’t dictate.
Of course you have determination, after all, you have set up your own business and you have probably weathered a fair few storms in your time, but don’t underestimate the sheer grittiness you will need to draw upon if your franchise is to succeed. Much of the your franchisees’ businesses will be outside your control such as the time they are willing to put in and the amount of marketing spend they are willing to allocate, sometimes you may feel like you are banging your head against a brick wall, meanwhile, others may wish to run off on a tangent or take it upon themselves to adopt a different approach (don’t dismiss this out of hand, they may be on to something), but you will need to make a determined effort to keep tabs on your franchisees.
All of the above takes time and effort so if you are short of either, franchising may not be for you. Do not underestimate the volume of time you will need to invest in ensuring your franchisees represent your brand and business and the amount of help and guidance they will need to be up and running, particularly in the early weeks. You will, inevitably, have less time to focus on your own business and it is imperative your branch remains the network’s flagship so you will need to ensure you have the right people in place back at base so your own business does not suffer.
Read on to discover whether your business model itself would make a good franchise.
In order to succeed, your business must have a strong brand on which other businesses can depend and easily duplicate. By that, we don’t mean the likes of McDonald’s or Subway, both hugely successful franchises, but basic marketing principles are in place so your business is not in danger of being diluted. For example, you will need a logo, a font and a website, which your franchisees can readily use and reinforce your brand image, making your business more easily recognisable to customers and clients in the market in which you operate, thereby continuing to underline your brand credibility. This should all be in place before you even consider expanding your business.
In order to operate smoothly, efficiently and, therefore, successfully, your business should have sound processes in place which are easy to follow and are therefore straightforward to replicate. Ask yourself how well your business runs when you are on holiday? If your business continues to run like clockwork, then you will have the right processes in place which make it easy for your staff to work effectively even when you’re not there, but if your business falls apart or literally lurches from one chaotic moment to another, you need to tighten up your operational measures and make sure all relevant staff understand the processes you have put in place.
If the above two points are in place, it is likely you have a model which can be easily replicated by a similar likeminded business person in another town. However, be sure your processes are not overly complicated or both your staff and your franchisees will struggle to implement them effectively and successfully. If your business is built on a simple idea with procedures which are easily duplicated and is backed by a solid brand identity, it is likely your model is ripe for franchise.
Lastly, in order to franchise your business successfully, it has to be profitable. Take a long hard honest look at your profit and loss over the past few years, compare the good months to the not-so-good, analyse why one month or year was more profitable than another in order that you have the very best understanding of your business’ performance. Not only will this help you to guide your franchisees when it comes to setting up their own businesses, but it will help you identify the areas where individual franchisees need help and spot the strong performers in your network who could help you nurture less successful branches. Crucially, you will want to attract only the very best franchisees to your network making profitability key to any recruitment drive.