Which Tasks Should New Franchisees Prioritise In Their First Year?

22/02/2018 17:00 | Start a business

Franchisee tasks in the first year

Franchising is one of the fastest growing industries in the UK, and its popularity continues to rise. There are now more than 40,000 franchise outlets operating across the country, with 92% of franchisees reporting profitability.

For entrepreneurs that have a desire to be their own boss, franchising is often the perfect solution. Buying a franchise comes with many benefits, but remember that you're not guaranteed success and your first 12 months will be tough, just as in any business.

To build the best foundation possible for your new franchise, there are some priority calls to make in the first year. Here are five elements to master for a successful year one, leading to a long and happy career as a franchisee:

1. Truly appreciate the franchise model

One of the most significant transitions that new franchisees need to make in the early days is a changed mindset from an employee to a business owner. Coming from an environment where your day is structured and organised by others contrasts with the increased responsibilities that youll face as a franchisee.

Adapting to the uniqueness of the franchise business model is key to your success in the world of franchising. Learning to follow the franchisors rules, while owning and operating your franchise is a balancing act that can take a while to master. Just remember the reasons why you chose the franchise model you're benefiting from a tried and tested franchise system with a proven track record of success with the support of an experienced franchisor.

Why bother trying to reinvent the wheel? Spend your first-year learning how to be the best franchisee you can be.

2. Become an expert in your business

As soon as you become a franchisee, you need to have a thorough understanding of your new franchise. From how the franchise system works, to the products and services you offer.

Another way to truly understand more about your new business is to spend time with existing franchisees from within the network. Many franchisors will encourage franchisees meeting up by arranging events where you and your peers can share stories and discuss any challenges you face. If such an event hasn't been organised, take a proactive approach and plan to meet up with other franchisees so you can learn from more experienced peers during your first year.

To be among the most profitable franchises you should also have an equally vast knowledge of the market and your competitors. In order to stay one step ahead of the game, your business plan needs to include competitive analysis. You should identify your key competitors as well as their strengths and weaknesses. The more you know about them, the better. Know their location, what they sell, how much they charge, their unique selling point, and their brand reputation.

3. Build a robust relationship with the franchisor

Of all the relationships youll develop when you become a franchisee, none will be as necessary as the one you build with the franchisor. Very often the onus is placed on the franchisor to put in the effort required to ensure that the relationship is a positive one, but you need to do your fair share too.

Improved technology means that it can be easy to avoid face to face time with the franchisor. Phone calls, texting, email; they all have their place, but nothing can compare to visiting head office regularly and meeting up with the franchisor in person.

During your first year, prioritise getting to know the franchisor as well as possible. Your achievements depend on your interpretation of their franchise system, so get all the help you can to become one of the most profitable franchises. Take time out of your busy schedule to share with the franchisor how youre performing, what your future aspirations are and what they can do to help you achieve your goals.

4. Understand that cash is king

Recognising the importance of cash flow and tracking it efficiently is key to becoming a profitable franchise. As a franchisee, you need to know how the amount of money you bring into your franchise relates to the amount going out. If your outgoings are more than your earnings, you need to make changes to avoid the failure of your new venture.

Failure to regularly track the movement of funds in and out of your franchise to identify its financial standpoint is the downfall of many franchisees in the first 12 months. Those who become a franchisee without sufficient working capital will be unable to cover their expenses when theyre due before the franchise is in a position to fund itself.

Even if your franchise is lucrative, it can still fail if your customers dont settle their bills on time if you still have your own bills to pay. Appreciating the distinction between cash flow and profit can result in either success or disaster.

Not only does lack of cash flow impact your franchise in the short-term, but it also jeopardises the longevity of the franchise system if you dont have the necessary funds to reinvest in the business. Without this, your franchise will not be able to develop and grow, even if you do manage to survive the first year.

5. Remember to celebrate your successes.

Its easy to become engrossed in running your franchise and almost forget that you've achieved your dream of business ownership. Surviving your first year in business is a milestone that should not be overlooked.

Take time out to thank your family and friends for supporting you through the late nights, long hours and lost weekends. Look around, take a deep breath and be proud of what you've achieved. You're a franchisee and enjoying the freedom and flexibility that you've always desired now that's worth celebrating!

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