Running a successful business? If you’re a keen entrepreneur, expansion plans are likely to be on your mind. Kicking off 2021 by creating a new business or setting up operations in a different location is an effective way to bring in more profit for your business - and your bank account. But if you don’t have the time to dedicate to running the logistics of a larger business or managing a big team, then franchising could be a good route for you.
The start of a new year is a great time for new beginnings. For many, 2021 will be particularly refreshing. After a difficult 2020, the new year presents an opportunity to get stuck into resolutions that fell by the wayside after all the disruptions. And for entrepreneurs, committing to pressing restart on business expansion plans will be the most exciting resolutions they make.
January is typically a quieter time for lots of businesses. So, with more time on your hands to get your head down, now is the ideal opportunity to reevaluate your strategy for growth. Hopefully, you’ll also be coming to it with fresh eyes and heaps of experience gained from last year, which will no doubt help you move forward.
The idea of managing a significantly bigger operation gives lots of business owners a headache, but that doesn’t mean you can’t expand. Franchising your business could be the answer.
Why become a franchisor?
Franchising your business is just one route to expansion, but it can be a very rewarding and lucrative one. Here are some of the advantages of running a franchise network.
- Less capital is needed - expanding a business usually requires large amounts of capital, which is often sourced through a business loan. With franchising, your franchisees will pay you to start their own business under your brand and model, meaning your outlay is minimal. To find out how you’d make money as a franchisor, read this quick guide.
- Fewer responsibilities - although you will need to dedicate time to getting your franchise off the ground, once the ball is rolling, you won’t have more jobs on your plate. This is different from traditional business expansion, where you would be in charge of a larger team, working with more suppliers and dealing with more customers.
- Focus on long-term growth - with the time you used to spend running your business now freed up, you can concentrate on growing your brand and finding new opportunities, which will help set you up for long-term success rather than just short-term profit.
- Give back to the business community - franchising your business enables you to give other entrepreneurs a way to start their business-owning journey.
Now that we’ve explained why the franchising model works so well for a business expansion, you’re probably wondering where to start. Read on for tips on how to create a franchising business model to make your 2021 new year’s resolution a success.
How to franchise your business
Each franchisor will have their own story of how they set up a franchise. But there are a number of steps that every new entrepreneur needs to take to turn their profitable business into a winning franchise. Here is your 2021 checklist of how to become a franchisor.
1. Decide if your business is franchiseable
Not every business works as a franchise. As well as generating a good profit, your business needs to tick a number of other boxes to suit the franchising model.
Firstly, it needs to be unique - otherwise, other entrepreneurs could simply copy your business model and become a competitor instead. Secondly, your business must be transferable, meaning it needs to work in another location and only require skills that you can teach others. Finally, it must be credible. Your brand and offering should be strong enough so other budding entrepreneurs want to run a location themselves.
To decide whether your business meets the criteria, investigate other locations, research competitors and ask people you know what they think about your brand. It may help to attend networking events to get a feel for the market and to scout out peer perceptions of your business.
>> Read more:
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- What It Really Means To Be a Franchisor
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- Why it’s Important for Franchisors to Visit Franchisees.
2. Get professional advice
Franchising your business is a big step, but one that you don’t need to take on your own. At the very least, you’ll need to work alongside a solicitor to create the franchise agreement and an accountant to make sure the financial structures are in place for your new venture.
You might also like to speak to a business consultant or mentor. Friends and family are likely to be very encouraging, so it pays to get some honest advice from someone with the expertise to help you navigate pitfalls.
3. Design your franchising package
Using all the advice you’ve gathered through your own research and through the expertise of others, you can start creating your franchise model. The aim here is to determine the franchisee/franchisor relationship - put simply, who is responsible for what. Remember, the relationship needs to be mutually beneficial, so think about how you will lighten the load for your franchisees and how they will make life easier for you.
Then, it’s a case of thinking about what the package will include. Will you offer an exclusive territory? Will you provide equipment? Is marketing material going to be included? Do they need to find a property? How much ongoing support will you offer?
4. Write your operations manual
Your operations manual lays out exactly how franchisees should run their business. Lay out your processes, quality standards, business policies, HR procedures and marketing guidelines. The aim of the manual is to ensure that every franchise operates in the same way, so that every customer and employee has the same experience with the business no matter which branch they come into contact with. You can read more about how to create your operations manual here.
Once you’ve created the manual, you’ll need to get back in touch with the solicitor to help finalise the agreement based on your offering.
>> Read more:
5. Create a franchisee training programme
One key reason why franchisees choose to buy into a franchise is the support they are offered. Rather than having to build up skills and knowledge from scratch, they can learn from their franchisor’s experience.
“Very few people have the natural ability or expertise to be efficient at all aspects of running a successful business. That is where the franchisor’s experience comes into play.”
—Ross Grossman, author of Franchise Bible
You need to think about all the skills needed to run the business and create a programme to teach your wisdom. Your programme might include a number of stages. For example, a cleaning business may have a week of on-the-job training to show new franchisors how to use the specific products and tools, followed by two weeks at the HQ to get to grips with your best practice guidelines and to learn the different online systems.
6. Recruit franchisees
This final stage of setting up your franchise is all about finding the right people to run the businesses. Before you start searching for new people, create your recruitment strategy. Think about the kind of people you want to recruit. Do they need to have specific skills? Do they need to be good with people? Should they already have business experience? Here are a few tips on what to look for in new franchisees that you might find helpful.
Once you know who you’re looking for, you can start marketing the opportunity. You could pay to advertise it on industry websites, attend business events or list it on a credible franchising network site. It also helps to speak to existing employees and engage with the community to scout potential franchisees.
Starting your franchising journey
If your new year’s resolution is to turn your business into a franchise, you’ll need to be dedicated to it. As you can see, there are a number of steps you need to take, and making it a success will take time.
Before you take the leap, it’s worthwhile doing plenty of research to make sure it’s the right move for you. To get started, why not take a look at our guide on what it really means to be a franchisor, or you could read up on what makes a great franchisor. Or if you have a specific query, use the search bar to find relevant articles in our extensive range.
Alice Tuffery, Point Franchise ©