Easy Hacks to Solve These 4 Common Business Pain Points
If you’re constantly blighted by the same business pain points, it can divert your attention from growing your franchise. In this article, we’re going to share some simple solutions for business problems that will make running a successful business so much easier.
There are some business pain points that always seem to rear their ugly heads. You might find that your supply chain is notoriously unreliable, or struggle to recruit great staff that will help your business flourish. The good news? Many of them can be banished by implementing straightforward strategies that keep your business healthy no matter what’s going on in the world. Here’s how you can stop four of the most common pain points from killing your business.
1. Poor cash flow
One of the biggest things that can trip up new business owners is poor cash flow. Cash flow refers to the money (or money equivalents like assets that can be sold on) that is coming in (through sales, donations, loans and grants, for example) and going out (to pay rent, debts, equipment/material costs and staff wages) of your business. All businesses should aim for positive cash flow (when more money is coming into your business than it’s paying out), as negative cash flow can lead to potentially fatal insolvency.
Poor cash flow doesn’t mean your business isn’t doing well. It can be caused by factors out of your control, like late payment from a client or an unexpected bill. But even profitable businesses can become insolvent if cash flow is not properly managed. If your cash flow takes a sudden turn for the worse, taking out a business loan can help you cover expenses in a true emergency. However, you should only consider a loan if your business is otherwise profitable and you know you can easily pay it off.
>> Read more:
- Franchising 101: The Complete Guide to Franchise Costs in the UK
- Franchising 101: 6 Top Contributors of Franchise Failure
- Franchising 101: How to Buy a Franchise Business in 10 Steps
- Franchising 101: The Official Franchise Start Up Checklist (Part 1)
- Franchising 101: Top 5 Qualities of a Franchisee
- Franchising 101: 6 Tips for Building Customer Loyalty Through Marketing
- Franchising 101: The Pros and Cons of Franchising Your Business
To stop problems occurring in the first place, you should look into cash flow forecasting. If you have an accountant, they can help you get started by identifying why your cash flow is poor. Going it alone? There are lots of great tools and apps that can help you get your head around it – PlanGuru, Float, Pulse and Quick Books are four of the most popular options. Really, though, all you need is a spreadsheet to start a simple cash flow forecast.
Financial and legal giant PwC recommends only planning as far ahead as you can accurately predict, so don’t try and forecast for the whole year unless you have reliable, ongoing contract work. Plot all of the expenses you have to pay, and when you have to pay them, against the money you know (or strongly believe) is going to be coming in. Planning ahead will show you if you’ve got negative cash flow before it becomes a problem so you can address it. If you have negative cash flow month on month, you’ll need to cut your expenses, as credit cards and loans are not long-term solutions. Many businesses find cheaper suppliers, make staff redundant or sell assets to free up more cash.
Other ways to make sure your cash flow is positive include:
- Sending out invoices as soon as work is completed
- Working with an accountant to regularly review your expenses
- Imposing strict payment deadlines for clients (30 days is a common payment term)
- Applying for a low-interest business credit card to help cash flow in emergencies
- Asking landlords or loan providers to move payment dates to coincide with payments (if there are times of the month when rolling contracts are paid)
- Regularly checking business accounts to make sure there’s always enough in them to cover ongoing expenses
2. A Bad Supply Chain
Another cause of many business owners’ headaches is their supply chain. Essentially, a supply chain is the network your company uses to get your product from its original state all the way to your customers. If you’re part of a franchise, your franchisor will likely have already established a strong, reliable supply chain and will be your go-to for any issues. Always check with them first if you’ve got a problem with, say, getting enough produce in for your restaurant.
However, if you’re going it alone (franchisee or not), it’s vital that you establish a good supply chain early on in your business’ lifespan. Fail to do so and no part of your business will be spared from potential issues. Each sector has unique supply chain challenges that need to be addressed, but here are a few tips that will stop serious problems occurring.
- Check if product/resource providers are doing so ethically. Even if voluntary concerns like climate-friendly manufacturing and fair pay for workers don’t bother you, using suppliers that operate illegally will land you in serious trouble.
- Make sure your supply chain can cope with demand ahead of time – KFC learnt this lesson the hard way in 2018 when it ran out of chicken.
- Address supply chain issues quickly to avoid disruption to your services – you want to manage your supply chain proactively, not reactively.
- Know who is responsible for each part of your supply chain and delegate responsibility if you’re in charge of a large business. This will help you stay on top of potential issues and jump in before they spiral into something serious.
3. A weak workforce
Getting the right staff can make the biggest difference to your franchise. Some sectors have higher turnover rates as a whole, like retail businesses and retail franchises (16%), restaurant franchises (17.2%) and tech companies (13%), so you’ll need to offer greater incentives to hold on to your best staff. Be choosy about who you recruit, even if it takes longer to fill your vacancies. It’s better to put your expansion plans on hold than to press on with an unsuitable employee.
Some franchises, like a beauty franchise or B2B franchise, can be harder to find the right employees for. Make sure you’re advertising your vacancies in the right places to attract the right talent, rather than just sticking them up on generic job sites. A specialist recruitment agency can also be a good option, as they will know where to find and how to target the best employees for your business. You could also approach local colleges or universities if you’re looking for staff with specific knowledge and don’t mind investing in someone with less experience.
If you’re consistently having staff issues, though, you’ll need to have a frank look at your business. Can you do more as a franchisee or business owner to make your staff happy? Do your salaries, employee benefits or working hours look worse than your competitors? Is a specific staff member causing problems? Or is there a less tangible issue, like low staff morale or a lack of opportunity, that is stopping your workforce from being their best?
4. Unpredictable external issues
Some problems come from virtually nowhere, and even the most conscientious business owner can’t predict every storm. If your business is generally healthy, you will likely find it easier to pull through a rough period and focus on resolving the most pressing issue. Here are just a few precautions you can take to fortify your business against unpredictable threats.
- Make sure you’re not spending or investing all of your profits. Keep a healthy amount in savings accounts you can easily access, or in liquid assets that can quickly be converted into cash.
- Nurture a great staff culture so you can build a reliable workforce
- Regularly review your finances and supply chain to make sure you’re always operating efficiently
- Prioritise marketing and new lead generation even when business is booming so you always have work coming in
- Build strong customer relationships to increase brand loyalty through tough times
- Improve your credit score so you can access the best rates on business loans in real emergencies
>> Read more:
Keeping your business healthy
As you can see, most common business pain points can be headed off early with sensible management. If you’re constantly reacting to problems within your business, rather than taking a proactive approach and nipping potential issues in the bud, you will struggle to grow and succeed as a franchise or business owner. Plan ahead and your business will flourish under your careful leadership. Looking for a new challenge? Check out our UK franchise directory to find the ideal franchise for you.
Sophie Cole, Point Franchise ©
Having an informed, engaged and fulfilled franchisee network can give you a competitive [...]Article published on 21/06/2020 08:00
Whether you’re working alone for the first time or have spent years flying solo, [...]Article published on 19/06/2020 08:00
Have you heard of the Franchising Code of Ethical Conduct? Developed by the British [...]Article published on 17/06/2020 10:07
Franchising your business can be a great way to expand into new territories. It’s [...]Article published on 09/07/2020 09:54
DEVELOPING YOUR OWN BUSINESS IN FRANCHISING
At a time when switching on the news can always feel disheartening, we thought [...]Article published on 08/07/2020 15:00
VARIOUS TOPICS – TRENDS IN FRANCHISING
The only specialist student letting agency franchise in the UK, with earning potential up to 2.5 times the income of a traditional letting agency
Student and Professional Lettings, Property Management, Residential and Investment Sales. We provide a heavily [...]Read more ›