Food Franchise

Posts Tagged ‘Business Plan’

If you have always wanted to start your own business, but lack experience and aren’t quite sure what you’d like to do then you need to look into becoming a franchisee. And with the number of different types of franchises available nowadays it’s more than likely you can find a business that you would truly enjoy being involved in. It gives you the satisfaction of running your own business while giving you the support of a larger organization.

Buying into an existing franchise can be a great way to fast-track your way to running your own business. By buying a franchise, you will be looking at a business that has already been tested out. Many existing franchises have been around for years and are hugely popular. This can be a good thing as you will know the business has already proven to be a success. Some of the largest companies in the country actually franchise their locations. The fast food industry has become very popular but many opportunities exist in other industries also.

If you do decide you want to own a franchise though be prepared to do some homework because there are many opportunities out there and you’ll need to find the one that is just right for you. A franchise or business opportunity may sound appealing, especially if you have limited resources or business experience. But you need to be careful. Some companies may claim that you’ll earn a certain income or that existing franchisees or business opportunity purchasers earn a certain amount. This of course is not always true. Also, recognize that once you buy the business, you may be competing with franchise owners or independent business people with more experience than you. In any business venture there is competition and depending on the franchise your competition could be another location.

If you’ve always wanted to own a business, but can’t come up with a unique idea that will differentiate you from the competition, and formulating your own business plan is intimidating, franchising can help you deal with that. But as with any business you’ll need to be a leader and learn you’re business inside and out to be successful. While a franchise comes with a lot of support it also is a lot of work. But if you’re not bursting with ideas for a business, buying a franchise might be a good choice for you.

When you buy a franchise, you are buying the product idea, the business system, and the brand’s reputation. You are typically taught how to run your business and enjoy comprehensive support systems. Franchises are mostly tested and proven business models. But make sure you know how long a franchise has existed. If you haven’t heard of them chances are neither has anybody else you know.

As a franchisee you will have specific products or services to sell and a business system to follow. But customers are more likely to trust a new business when it is a branded business franchise, as they know that the franchisee is working to a regulated franchise definition and the service will be consistent. As I mentioned earlier you get the advantage of that franchise’s reputation to help you get started. You get instant credibility.

If you are interested in starting your own business choose a franchise and contact the franchisor direct. However, you need to be aware of the pitfalls that must be avoided when you buy a franchise. Picking a franchise simply because it has a high income potential is a grave mistake. When you consider the fact that a franchise can cost well over $100,000 to purchase, you can’t afford to pay for something you don’t like. You need to buy into a franchise that does something you’ll enjoy doing too. One of the most prominent advantages is the fact that the the franchise is already established, and you don’t have to spend a great deal of time and energy building up the brand name.

Next you will want to conduct research on the parent company that owns the franchise. Learn as much as you can about a franchise before you buy it. You’ll want to know the cost to include franchise fees, store build out costs and any ongoing fees they charge such as a percentage of profits. And you’ll want to know what amount of your money goes into things like advertising. You need to know what kind of training they provide both initial and ongoing. One of the best ways to research a franchise is to contact franchisees within the company. That way you won’t be getting a sales pitch. If you can, try to request a meeting face to face with the franchiser. If the franchise is not well organized, this is a red flag that you should pay attention to. Seeing their offices and existing locations can provide you with a sense of security in your dealings with the franchiser.

A franchise can be a great way to become your own boss while still receiving the support of a larger organization. Finding the right franchise could just be the thing for you.

Buying the right franchise and then running it successfully go hand in hand. The major franchise companies have a vested interest in seeing that a buyer connected with them does well and does not have to close the doors in failure.With this in mind, they will do every thing they can to help the buyer end up running a successful franchise. Here are the key elements to running a successful franchise.

Start with a successful franchiser

When you buy a franchise and start with one that is uniformly successful with new franchises; then you have increased the odds of being successful. They know the ropes and they teach how to do it and what to do. They leave very little to chance or good business luck. With a detailed business plan and a willingness on your part to follow it to the letter, you will be on the road to success. Their plan will cover every aspect of running a franchise. They will teach you how to manage employees after you have hired them. You will learn about rewards and discipline. They will show you efficient ways to keep your paper work so that it can be accomplished with the least amount of time. You will be directed to good suppliers and other business services that will serve the business well. If you have any question they are a remarkably good source for an answer as they have years of experience and they have probably solved the problem before.

So, give yourself a leg up and start out with a proven winner. You will more than likely get to your profit range sooner than later.

Follow their plan and ask lots of questions

They have already invented the wheel. You do not have to do that again. Their plan has been proven successful many times and any corrections have already been made. It does not hurt to ask questions so you can see the reasons behind their suggestions, which will help you, understand with more depth. Getting to the basics of the plan will give you more faith in it. Understanding why they came up with a certain solution to a problem or a potential problem is enlightening and will let you see how smart they are about the franchise business. Respect for their knowledge will come with time as you see their solutions come to resolution.

Take advantage of any seminars and owner meetings

Take advantage of any seminars, training sessions or owner meetings that come available. These can be gold mines of information and you will meet other owners who have the same problems and have resolved them. Take advantage of a room filled with experience. Ask questions and listen carefully to the answers. This suggestion is particularly valuable when you first are in the business and every aspect of it is new to you. Later send your assistants to the meetings and let them get educated. A well-trained staff should be the goal of any owner, as this will improve the overall performance of the business. Over time it will also let you have some free time, as you know the business is in good hands. Reward your staff for doing their job well. A compliment given at the right moment can do wonders for the morale of an employee. Employees like to feel that the owner knows they are doing a good job. Complimenting on their work is very well received.

Hiring and firing employees

Finding good employees who show up to work on time, do their work with a minimum of mistakes and come to work drug free is the bane of most owners of a franchise business. This is especially true in the fast food business.

What to look for when hiring potential employees? If they have worked somewhere else, good references are always a good sign. If they have not been employed before look at their high school grades. Good students demonstrate two things by their grades. They are willing to do the work to get them and they have the ability to be taught. There is nothing wrong with having smart people work for you. If they have real talent, promote them as soon as possible to more responsible work. A good staff will make your job as owner and manager much easier to do.

Another way to check out a young person is ask for any letters of reference they may have from teachers, coaches or their church. A sincere letter of reference is a very good sign of good character.

If an employee is failing at the job, have a meeting and let them know where they are failing and what they need to do to improve their performance. It they correct the problem that should be the end of it. If they do not improve to the point you want, let them go and tell them why. Document every thing about this employee problem including the first meeting and any subsequent meetings. You may need it later if the employee tries to come after you for some reason. Being able to prove what you discussed and why will go along way toward proving the firing was justified.

Paper work

Paper work has bogged down more than one owner and caused problems that should have never happened. The use of a computer is worth learning, as it will help to organize this least liked activity for most business owners. If you can afford it, hire a person that does it for a living and likes to do the work. This will help a great deal with what you have to do. There are certain reports that are mandatory for all businesses, like employee payroll tax, sales tax and disability in some states. These need to be accurate and turned in on time. Bring in a professional and spend your time on marketing and other areas that you enjoy. Your business will be better off for it and you will be happier as the owner.

Conclusions

These areas just touch some of the basics that are needed to run a business in a successful way. There is the whole area of marketing and advertising to be considered. Listen to what the franchisers suggest or offer in these areas. They know what works and at least in the beginning you will be well served to listen to their advice. Customer relations are an entire area for a seminar meeting. Handling of the customers who visit you business is critical to growth. Most businesses depend on repeat customers to grow. How a customer is treated the first time they have dealings with your business could impress them or sour them on doing future business with you. Customers respond to smiling, courteous, competent help. They do not like to deal with lazy, dolts who could care less. If you have such a person working for you they should be the first person you let go.

The Internet is a very good place to read about successful franchises and how they do it. There are also franchise associations that have very good publications and meetings that an owner can learn from. Knowledge and education are very important to a successful continuing operation. What you know can help. What you do not know can hurt you. It is obvious what you should do to gain the path to success.

 

The best new ideas are often old ideas brought back to life. Sometimes the ideas are altered to fit particular circumstances but, many times, the application is altered to fit current circumstances.

Over twenty years ago, when I was in the financial services industry, I decided to alter our business from commission-based to charging a monthly fee based on a percentage of assets. This was a radical thought at the time because the brokerage business was based on commissions. The change was also difficult to execute because it took some time for monthly income (based on a lower rate) to catch up to handle current overhead. The change required confidence that the new monthly fees would last and we had to temporarily cut overhead at the same time.

Fortunately, it proved to be the best decision I ever made in business. Since that pivotal moment, I have never had a business that did not have a continuity component attached to it. Additionally, every business we consult with is taught the value of continuity and has it structured into their business plan.

Continuity income is simply income that is based on a monthly plan or membership program. If you have a continuity program, you can count on a certain income stream coming in each month whether you find a new client or not. This is not to say that you do not need to keep looking for new clients, because you do. Instead, it is a mechanism that produces income so that, should you have a bad month in finding new business, or should the economy falter, you still have money coming in regularly, allowing for time to make adjustments. If you do not have a continuity program in your business or profession at this time you have to get a certain amount of new customers or you are going to have serious problems in a short amount of time.

The ideal goal in a continuity program is for the continuity to first cover your monthly overhead. When you do that, all new business goes to profit and expansion. The next goal is to make money just on your continuity.

When we present the continuity factor to clients, some have an immediate “ahhh” experience. Others struggle with how the application could possibly be structured into their business. These clients frequently say the same thing: “But my business is different.” Trust us. It’s not. Let me give you some examples so you can see the applications of continuity in different businesses. Our goal is for you to consider how continuity can be applied to your business so you can enjoy its benefits.

A real estate broker in Iowa works exclusively with investors. He has a successful track record of finding good income-producing properties. He offers a tiered continuity program where investors pay different amounts each month for the opportunity to be higher up on his investor list in order to see new properties first. For $1,000 per month, you get to see them immediately. In addition, he must agree to work with you exclusively and give you a fee as a buyers’ broker when you buy the property. He also represents you when you sell the property. The continuity factor in his business takes the pressure off having to find something new in a particular month.

Frequently, continuity is designed around a marketing service or an ad campaign that a company has developed to consistently produce new clients. For example, a client we are working with has a commercial cleaning company. They have developed a very successful lead generation system. We are developing a monthly payment program based on providing leads to other cleaning companies in non-competitive areas that pay a fee for the exclusive rights to those proven marketing methods.

Our latest client is a pizza business, which our law firm is franchising. The pizza delivery company sells a monthly membership service that gives discounts and higher priority for phone orders based on membership levels.

And to blow your mind even more: We actually know of a funeral director that guarantees recovery for the family of a lost one and charges a continuity fee for counseling and grief services.

Continuity in your business will improve your income and your stress level. We encourage you to think about how continuity can be used in your business. If you want help, let us know.