Increase your Chances for Success

You have just started in your new franchise. You completed the training with flying colours, and you are confident that success is just around the corner. It has to be doesn’t it?

So often I see new franchisees thinking that because they’re part of a franchise network, the systems and the brand will do it all for them. This level of thinking is quite common and blows me away every time I hear it.

Perhaps you have been in your franchise for just a few weeks, or perhaps more than a few months and the initial rush and buzz has wound down and it’s starting to become more challenging than you thought it would be. You are possibly now thinking more business, increased profits and more free time would be nice. So how do you achieve that? How do you guarantee your success, how do you ensure long term sustainable success?

If your franchisor could wave a magic wand and suddenly change something about your business what one thing would you have them change? Would you have them provide you with an easier way to contact more, better qualified prospects,
and would you want those prospects as well as your current customers to view you as even more of a professional, or maybe even an expert in your field?

Perhaps you run a retail business and you would like to be a more effective sales
person and deliver more superb customer service. Perhaps you are in a service based business where you would like to be a more effective presenter, or more effective at closing sales or handling objections. Or is repeat business more important to you?

The list of questions could just go on and on. As a Franchise Coach I am often asked all these questions and more. In a nutshell people want to know how they can be more successful. How can they get more out of their franchise that they have either just bought, or have been running for a while. The systems show you how to run the business and that’s great. What can you do though, to take your business to higher levels and beyond?

The key point to make right here is the only person who should be responsible for waving the magic wand over your business is you. Sure you have bought a franchise and that should make you instantly successful right? Well not really. There are a few other ingredients you need to mix with the proven franchise system and the tools that your franchisor has given to you to make things the way you want them to be. Your goals for your business will always be different to another franchisee in your network, so it’s important to look at the other ingredients and combine them with the tools provided to create the ultimate success you not only desire, you deserve.

Throughout this article I will be discussing some areas and other factors that are critical for you to realise real business success. We will explore some of these key areas that you can begin to put to use immediately to help you improve the results in your business and your life. I could write a book on this topic so these key areas will get you started and perhaps look out for the book in the New Year, I might just have to write one. Take these general ideas and start focusing on those areas in your business.

For more comprehensive information on how to be more successful in your business feel free to email me for more information.

Start With The Right Mindset

Whether you make it or not in business, success comes down to one fundamental
characteristic, one vital ingredient. That ingredient is you must have a mindset of a successful business person. Study successful people if you have to. Look at the greats and what characteristics they had that kept them on track, that kept them persevering through the hard times and driving them forward in the
good times. If you don’t have the right attitude and the nose for business you will struggle.

Changing Our Thoughts

We all have thoughts. Everything you have done from birth to this moment is based on thoughts. It’s these thoughts that control us
and affect the way we feel. Over time these feelings create your belief systems, which include your feelings about “who you are” and “what your place is in the world.” These can be negative or positive. Our feelings and beliefs are what determine our actions. We tend to act consistently with the beliefs we have developed over time.

So our thoughts, create our beliefs, which then determine our behaviour. It is then our behaviour which determines the actions we take and it’s the actions we take which determine our results in life and business be that positive or negative.

If you want to develop your own freedom and personal responsibility for your life and business success, it’s important to make a conscious decision to do so.

The Business You Are In

If you do not take anything else from this article, remember this…
You are in the Sales & Marketing Business. Until you completely understand this, your business will be no better than, or no different to, any of the other choices your prospects and customers can select to do business with.

There are more and more franchised brands coming to play in the market, so it’s vital to understand that you are not in the business of selling coffee or making burgers or cleaning pools or mowing lawns. You are in the sales & marketing business. It’s what your product or service does for the customer and not the actual product or service itself.

The marketplace you operate in is so fiercely competitive, so cutthroat, and so unforgiving that you absolutely must do something to differentiate yourself from your competition. It could be just that little something you do to make the customer feel they belong with your company. Remember your customers names, offer that little extra, invite them to come back and make them feel welcome are just a few ideas. How many times have you done business with someone who really doesn’t make you feel welcome at all. Do you go back… No. Why would you?

Taking Action Makes the Difference

Most people I talk to they believe that knowledge is power! I believe they are only half way there with this statement. Only Applied Knowledge is Power. It’s not what you know it’s what you do with what you know that counts! Start Today, Take Action not just in your business. Take Action in your life as well.

Goal Setting

In order to take Action you need to know where you are headed. Success requires Goals! Some laugh at the old saying: “If you fail to plan, you plan to fail.” Maybe you think goal setting is not that important. I urge you to Think Again!

Clearly defined goals and strategy are the single most important structure in long-term effectiveness, profitability and sustainability in your business. They need to be constantly revisited, refocused, and re-shared with those who implement it in the real world.

If you are too busy to spend time with your strategy, you are too busy to succeed and will ultimately fail. You only have to look around at others who have failed this lesson.

Focusing on one’s goals helps make business enjoyable, and lessens that feeling of being torn apart at the seams. After all life should be fun and enjoyable. When you have a direction and a plan then you don’t have to worry about so many unknowns. The benefits of goal setting are enormous, and there are meaningful values to be gained from practical goal setting. Goals direct us, they help us achieve higher results, because they are focused on results. Just remember: your goals should be SMART goals.

Specific, Measurable, Achievable, Realistic and Time Bound.

Eliminate Procrastination

It’s a word that we all understand from first hand experience. In business, procrastination costs time, money and sometimes the goodwill of a customer or a fellow worker. So how can we stop putting off what we need to do? Sometimes a task or a project seems mind boggling. Plot it out on paper to make it more manageable. Break the project into smaller chunks. Decide on a deadline to complete each task and block in time on your calendar to do it.

As you jot down your project schedule, figure out your most productive work hours. Set aside at least a couple of hours at your best time of day to grab the project by its horns. If you work in an office, you are probably interrupted an average of every six to nine minutes. So, put a note on your door saying “quiet time” and ask your staff not to interrupt.

Keep these tips in mind. Don’t just plan. Start NOW. Do something, anything, to get the project going. Work at least ten minutes and chances are, you will get involved and keep working Furthermore you might finish sooner than
you think.

The Most Profitable Thing You Can Do In Your Business

Follow Up With Your Current And Past Customers With An Unrelenting Vengeance

The most effective, the most cost-efficient, the most profitable thing you can do in your business is to create a database of your current and past customers and follow up with them. It doesn’t have to be an elaborate system, plan or strategy and it doesn’t have to cost you a fortune either, it does have to be well thought-out, planned and tailored to the unique wants of your customers if you want it to be overwhelmingly successful.

This one strategy is the most overlooked, yet most effective marketing tool you have in your “toolbox” for getting your customers – current or past – to buy from you more often, extending their buying lifetime with you and getting them to refer others to you.

Closing The Back Door
How to Keep Your Customers For Life!

For the most part, your financial and business success is largely dependent on two factors:

1. The amount of income you receive, and
2. Your ability to control expenditures.

The first factor, your ability to generate income, is perhaps, the most important
activity you can pursue on a daily basis.

Income, or the amount of money your business takes in, makes everything in your
business possible. The creation of revenue dollars for your business can be divided into two sections:

1. The acquisition of new business, and
2. The retention of existing business.

The retention of, or reselling to existing customers is much more profitable than
acquiring new customers. It is far easier to sell additional products or services to existing customers – people who already know you, like you, and trust you, than it is to new prospects.

The average business spends six times more to attract new customers, than it does to keep its existing customers on the books.

So Why Do Customers Quit?

It seems almost futile for a business to spend the time, effort and money to bring a thousand or more new customers in the front door each year, only to lose nearly that many out the back door. Yet that scenario is all too often experienced by too many businesses each year.

Why is it that so many people leave one business, and begin trading with another?People who, at one time were so happy with the company, business, advisor, or
salesperson they dealt with, the product or service they purchased, or the price they were paid for it, but left to go somewhere else and start up an entirely new relationship with another salesperson and company. Why do people do that?

The correct answer to that question is critical, and will pinpoint the problem.
Once identified, you can begin to develop a solution. Your implementation of that
solution will determine the amount of your renewal or repurchase income.

A survey on “Why Customers Quit,” revealed some interesting statistics:

  • 3 percent move away
  • 5 percent develop other friendships
  • 9 percent leave for competitive reasons
  • 14 percent are dissatisfied with the product
  • 68 percent quit because of an attitude of indifference toward the customer by the owner, manager or some employee.

Start getting feedback from your customers, perhaps have a questionnaire they can fill out, start measuring the numbers. What ever you do though make it a point to call and follow up your existing customers and ask them for their
feedback. This will show your customers that you care and take their comments seriously.

Where to from here? As I said earlier in this article this is a topic that I could write a book on. You have been exposed to just a few areas that are available to help you become more successful. Ultimately it’s up to you. Just
being exposed to them is not enough. You must do something with them.

Start planning, take action and you will be amazed at your results.

Get More out of Business and Get More out of Life

How much do like what you do right now to make money? Do you wake up at three in the morning, and can’t sleep because you are just so eager and excited to get going on your work? Such people are happy people, and very often they get either rich, famous, or both.

If you don’t have this kind of passion for what you do, you’re wasting your time and your life. Even if your job pays well, hating that job is like living a kind of ‘half-life’. You suffer through the work week and live for the weekends.

I urge you to quit the job you have right now, or sell your business if you hate it, and find something you can be passionate about. If you are just not in a position to move on from the business you are in then I urge you to find the passion within what you are currently doing. Re-ignite it. They say if you do what you love, the money will follow.

Even if you don’t really hate your job or your business, but don’t particularly care for it either, I still say you’re wasting your time. You’re merely ‘running out the clock’ on your life as you wait for retirement. It is said that an artist never retires. Why should they when they love what they do? Their work is their play. But it shouldn’t be true of only artists. The world of business can provide all the fun, creative stimulation and joy an artist gets from his or her work.

All this leads up to an important business concept I’m going to tell you about right now. It’s this: You must be aggressive and proactive, rather than passive and reactive, in order to create higher levels of success. A passive business owner may have a steady supply of customers who support the business, but that business never really takes off to achieve spectacular sales and profits. A reactive business owner only makes a change when something negative happens. They react and sometimes not to their best advantage. If things are going along fine, they’ll just continue to go through the motions.

A proactive business owner never settles for ‘good enough.’ Even if business is brisk, the proactive entrepreneur takes aggressive action to make things even better. For example, a proactive business person makes a single successful sale to a customer, he won’t rest until he does everything he can to make second, third, fourth, and maybe even more sales. That means he or she has to take action. They’ve got to develop new products for those new sales. They’ve got to reach out to the customer with direct mail, a phone call, or key advertisements. They’ve got to come up with a ‘can’t refuse offer’ for those additional sales. They’ve got to test the market to find out where more business can be squeezed out.

I have mentioned this before and it’s worth mentioning again. There are two types
of business people I have found over the years of consulting and coaching. Those
who are interested and those who are really committed to their success. Those who are interested will do what is convenient to them and they wonder why they don’t seem to progress as fast as others do. Those who are committed do whatever it takes to realise their dreams and goals and more.

Time to Take Action

Why not get out your customer list right now? Select the names of 20 of your best customers. Instead of just waiting for them to come in again—get proactive and go after them. Give them a call to thank them for their business, and then tell them about the new product or service you know will make their lives better. Or send them a postcard with a hot offer. Send them a sales letter or send a live person out to visit them. Whatever you do, don’t lay back and be passive. Sure they might come in again and buy from you, at some time on some day, whenever! When you take a proactive stance, you can’t stand waiting! You go out and get them!

I promise you this ‘20 Customer’ exercise will open your eyes. You’ll be amazed at how many extra sales you get, sales you might not have had without taking aggressive action.

The only fuel for a proactive, aggressive business stance is passion, a love for what you do. If you hate your job or the business you are in, you may get aggressive and proactive for a while, but you’ll quickly burn out and go back
to ‘dull normal’ mode.

So do whatever it takes to shake up your life and get passionate about what you need to do to make money. When you do, you’ll make money, and better yet, you’ll have fun while you’re doing it!

Whatever You Do, Stop Wasting Time

Why do you think banks traditionally placed clocks outside their buildings? Because they know that time is money. In fact, it’s with banks that this whole idea of calculating interest rates, based on time, got started. If you have a loan, it’s that inevitable, unstoppable ticking of the clock which is determining how much money you owe in interest payments.

If you really want to look into this more deeply, read up on the history of capitalism and banking. You’ll be amazed. Our entire monetary system rests upon a modern concept of time, which was given to us by astronomers, such as Copernicus, Galileo and Newton. Indeed, it is Sir Isaac Newton’s ‘clockwork universe’ that has shaped our modern conception that time is money, perhaps more than anything else.

Ever wonder why we say: “How do you plan to spend your time?” It’s because time and money are intimately tied to each other. Okay, had enough of the history lesson? Want me to get to the point? The point is that the statement that time is money is far more than a cliché. It’s a basic reality because of the fundamental way we do things.

And I can’t make this statement strongly enough: NOTHING IS MORE VALUABLE THAN
YOUR TIME! At the start of each new day, you are issued a fresh 24 hours, that’s 1400 minutes and 86,400 seconds. If you think of each of those hours minutes and seconds as having a monetary value, and they do, every one you waste is money lost forever. You must start paying attention to your time each day, and how you spend it.

How much actual time do you commit to making money with your business? You don’t know if you don’t pay attention. If you start keeping a daily log of how much time you actually spend on money making activities, you may be in for a surprise. What about all that time spent chatting around the water cooler or the coffee machine? It can be nice, but it earns you nothing. Do you waste time with people? Most do. If you decide to spend 15 minutes shooting the breeze about the World Cup, even if it’s with a client, that time is lost money. And we all know people that are what I call ‘dumpers.’ These are people who call you up or visit personally and steal 20 or 30 minutes just telling you about their problems. It’s great for them because they feel better after unloading on you, at the expense
of your precious time. But you get nothing, except for the reputation of being a ‘good listener.’

There’s nothing especially wrong with that, but when it’s time to conduct business, then you should be doing business. I suggest that no less than 85 per cent of your day be focused on making money, and making things happen for your business. The biggest reasons people waste time is because:

A. They have not internalised and do not remain conscious of the fact that time is money.
B. They simply aren’t paying attention to where they spend their time

Time to Take Action

Play a mental game with yourself, starting at minute one of your next day. Every 15 minutes or so, stop and ask yourself: “Is what I am doing right now moving me forward toward my earning goals?” Do it every 15 minutes.

Set an alarm clock if you have to. A wrist watch with a timer on it that beeps is great for this or even your blackberry. The idea is to shake up your conscious and unconscious mind. Wake yourself up as to how you’re spending your time! Put yourself on notice: “I will stop wasting time!” or “I always maximise my time!” The thing about wasting time is that it’s insidious. It creeps up on us while we’re not paying attention. Before we know it, days, weeks and months are lost in nonproductive activity. You can really get on top of this by keeping a time log for a week or so and recording every activity you do in your business and the amount of time it takes. You will be amazed about how much time you really do spend on non-productive tasks.

Once you get aware of this, once you awaken to the idea that every moment counts you’ll stop wasting time, and you’ll start getting things done twice as fast, three times as fast, or even faster. When that happens, I promise you that you’ll notice a magical effect. You’ll start getting a lot more done and again, this
will seem magical you’ll start making a lot more money and start enjoying a lot more time freedom!

Managing your time during work actually frees up more time to spend with family, loved ones and your favourite non-work activities. So stop wasting time. Ultimately, you’ve only been allotted a certain amount of time on this planet, so why waste it?

Promote Your Business for Free

How would you like to get twice as many new customers for one-third of the cost of anything you’ve ever done before – or even for FREE? If that sounds out of reach to you, please find a quiet spot and read this article very carefully. You are about to learn an affordable and effective way to get new customers, extra sales and leads for your business.

In today’s economic climate, in fact in any economic climate, people are very cautious about dealing with strangers. This means, that no matter how good your product or service is, you have to overcome two major hurdles.

1. You have to convince the purchaser that your product or service is what they really want and need. (Remember, people buy more of what they want, rather than more of what they need).

2. You have to assure them that your company will deliver as you promise. In other words, that they can trust you. To some extent you may overcome these hurdles with a money-back guarantee or some sort of a free trial.

However, you’ll do far, far better if you:

Stop trying to do business with strangers

Let’s face it. It’s hard. It’s expensive, and it can be draining on you and your staffs’ energies. After all, to win the trust of a person who doesn’t know you takes time and effort. And at the end of it all, you still can’t be sure if you’ll get their business or not. However, having the trust of a person is crucial if they are going to buy from you. That’s why the easiest sales are to people who have already bought from you, or from referral business. So how do you get someone’s trust in a way that won’t break the bank? Quite simply like this…

Instead of approaching prospective customers who don’t know you, get someone else to introduce you first. Of course, being introduced to someone is no guarantee of a lifelong relationship. However, what it does do, is give you the chance to state your proposition. In other words, the other person is more likely to listen to you and give you a chance to sell yourself and what you have to offer.

Now you may be wondering, ‘Why would another business want to introduce me and what I’m selling?’ There are a number of reasons why someone may want to recommend you. Here’s a few of them:

1. They may recommend you if you have given them value far above and beyond what they expected, and they like you and your product.

2. Maybe they’ll do it because they want you to introduce them to your customers.

3. Maybe they’ll do it because if their customers buy your products or services, they’ll then need more of their product or service as a result. This is especially true if you show your customers how to grow their business and get more customers. As they grow, you get more business from them.

4. They may do it because you pay them to introduce you or you offer them an incentive.

5. Or they may do it because they know their customers will want your product or service and that they’ll get goodwill and thanks from their customers for letting them know about it.

Before I show you how to apply this knowledge in your business let me share a very important fact with you: Every single person you want to reach, is already someone else’s customer. Which means they are already currently buying products and services similar to what you offer. Providing that the business they are buying from is doing a good job, these customers will trust a recommendation from that business.

Here is an example of how it could work.

Let’s pretend for a moment that you have just released a really hot new marketing manual. This manual is full of information and materials to help you increase your business.

Now, let’s suppose the people who have invested in your manual are really switched on business owners and professionals, who have as their customers and friends, other business owners. And these switched on people understand that if they make this money making information available to their customers, then their customers will learn how to get more business, and they in turn will also benefit. Imagine this, you are an accountant, a printer, or any supplier to other businesses and your customers double their business. What happens to your business?

Personal Qualities Required for Success

Outstanding success is dependent on many different factors. For some people, it just happens. They’re in the right place at the right time, they do nothing special, and everything just falls into place for them. Others put in long hours and much work, only to find average success.

Continuing with the theme of how to maximize your potential this year, I thought I would help you gain a clear understanding of just some of the personal traits, characteristics and success principles that can help move you towards your goals faster. 

1. Know What You Want

Know yourself and exactly what you want and expect out of your business. So many people enter into business and spend years in that business environment without having any idea of what they want, or what is possible to get out of their business.

In fact, most business owners are working so hard in their business that they don’t have time to work on their business. As a result, the business owner becomes a slave working for their business rather than their business working for them.

Take the time to carefully assess where you are now, and what you want to accomplish in your business. Then begin to set some meaningful goals to help you accomplish your objectives. You see, if you don’t know where you want to go, you’ll have no idea of what to do in order to get there.

Meaningful goals are an essential requirement for success in business. With goals, you have a target to aim for, a purpose for being, and a direction to travel. Without goals, it’s easy to wander aimlessly, getting sidetracked with any little thing that comes along.

Your goals should be SMART goals. That is, your goals should be:

  • Specific,
  • Measurable,
  • Achievable,
  • Realistic, and
  • Time‑bound

It is important for your goals to be Specific, so you will know exactly what you’re shooting for. Your goal should be clearly defined and identified so you not only know what you are trying to accomplish, you’ll also know when you achieve it.

Your goals should also be Measurable. That is, there should be a system, or method of determining how you are progressing in your efforts. It’s important for you to be able to see your current status, as well as progression towards your goals.

Next, your goals should be Achievable. If your goal is set too high it won’t take long for you to become discouraged, and you will either lose concentration and the drive necessary to pursue your goal, or you will abandon it altogether.

Now when it comes to setting goals you need to make sure your goals are not only achievable, but are also…

Realistic. If your goal isn’t realistic, that is, if it’s not something within your realm of achievement, it’s just a matter of time before you’ll become frustrated and give up. And that can have a negative effect on you as you begin to think of yourself as a failure, or not being good at setting and achieving your goals.

The key to being good at setting and achieving goals, is to be realistic in your expectations.

Your next step is to make your goals, Time‑bound. All the previous steps won’t serve you well if you do not put a deadline or a time frame to your goals. This helps you keep on target, not be distracted, and encourages you to complete something you’ve started.

2. The Ability to Focus

Many people hesitate going into business because they think they lack the talents and abilities necessary to succeed. They look at others who are successful and think that they must have unique talents or capabilities.

A successful person is one who has developed the ability to focus and maintain that focus on clearly identified and specific goals.

3. Determine the Price You’ll Pay

You must determine the price you are willing to pay to be successful. For everything in life, there is a price. In many instances, it takes sacrifice. If you want to reap great rewards in your business, you’re going to have to do some not-so-glamorous things at some not-so-convenient times.  It’s this simple, successful people are simply willing to do what the unsuccessful people are not.

That may mean, depending on the type of business you have, that you’ll have to step out of your comfort zone often in order to get the results you want.

If you are just starting out in business, or want to increase your existing business or achieve some new goals, you may have to make some sacrifices. If you are not willing to make the necessary sacrifices, then you can’t expect to be as successful in business as someone who is willing to make those sacrifices.

4. Self Responsibility

I have covered this in one of my previous articles, but this one has to be mentioned again. You are totally responsible for your success. There are no excuses. There may be set‑backs or economic down‑turns, or problems that affect your business. Your franchisor may implement things you don’t like, peers within the network may irritate you, and the direction of the business may turn a corner in the opposite direction you were hoping for. Economies change, corporate policies change, and prospects don’t buy from you, and the weather is too hot or too cold. While those things definitely have an impact on you, the way you do business and the sales you make, it is important to realise that regardless it is up to you, and you alone, to accept responsibility for the success of your business and do what it takes to make it a success.

No matter how bad you might have it, no matter what difficulties or challenges you might encounter, let me assure you that there are many people who have had difficulties and challenges far greater than any you are ever likely to encounter, and somehow, they manage to pull through. Responsibility should sit on no one else’s shoulders but yours!

5. Be Committed

Make a total commitment to your success. Once you have made the decision to be in business, be in that business. Get into it with both feet. Don’t let anything hold you back.

I have found there are two types of business people. Those who are interested in success, and those who are committed. Those who are interested will do whatever is convenient to them. Those who are committed to their success will do whatever it takes.

Make a commitment that you are going to succeed, no matter what.

6. The Extra Mile

You must be willing to go the extra mile. It’s the “Under promise, over deliver” concept. When you go the extra mile for your customers or clients, you’ve just set the stage for future success. “normal” service, or “adequate” service or even “good” service, just won’t do anymore. Everyone else is doing that too. Be Outstanding! Go the extra mile for your clients. You’ll be amazed at the result.

7. Control Your Time

Success requires you to be a master of your workday and take control of your time. Time is an expendable commodity. Each one of us has the same 24 hours in each day. When those hours are gone, they cannot be replaced. They are gone forever, never to be recaptured. You must treat your time as precious, and guard it wisely and selfishly. Don’t let anyone disrupt you or take you away from the focus you have on your goals. If you are serious about business success – really serious, then this is one of the most important and critical areas to defend.

8. Persistence and Determination

Successful people are determined and persist through even the toughest of times. From time to time you will encounter set‑backs or reach plateaus where it seems like nothing is going right. Your competitors lower prices, run massive ad campaigns and your customers and clients begin doing business with them. Business is walking out the back door faster than it’s coming in the front door. Your volume is beginning to drop, and you become concerned. You seem to be spending more time in a defensive posture than you do in servicing your existing customers, and you’re losing. Now is not the time to give up. Now is the time to dig in and begin to play offensively. To be determined not to lose your good customers – the ones you worked so hard to get. Your strategy should be to keep in touch with them and continue providing exceptional service. Nearly every business is cyclical. Eventually things will change. While you can’t be competitive on price all the time, you can be competitive on the service you give, the value you provide and the empathy you have for your customers and their challenges. More importantly, no matter what, never, never, never give up!

Time to Take Action

Now, knowledge is all but useless unless it’s applied. Well now it’s time to review what you have just read and implement it into your every day.

What do you want? Take some time to clearly define what it is you want and go ahead and set some SMART goals for the next 90 days.

  • What can you do to maintain a laser beam focus and ensure you take Consistent Daily Action and assume 100% responsibility for your success? What can you do to ensure you stay disciplined and focused on achieving your desired outcomes?
  • What actions are you going to take over the next 90 days to get better results and close the gap between where you are and where you want to be?
  • How can you go the extra mile in your business? Starting today!
  • Take the time to learn how to prioritise and manage your time and workday.
  • What will not achieving your outcomes cost you? What are you going to do to ensure you achieve the success you deserve in your business?

Choosing A Franchise

Choosing a successful franchise

It’s exciting times ahead. You have decided to go into business for yourself, and not by yourself. You believe that investing in your own franchise is the best option for you and it’s more than likely been a long and hard decision, eliminating a few industries or franchise types along the way that you know just aren’t a good fit.

Now you have short listed some industry sectors down to those that interest you, a good place to start looking for available franchises is your major city newspaper, or industry specific franchise magazines and websites. Here you will be able to either call the company or email them if online and request an information pack. Some information packs provide in depth information whilst others provide a general overview of the franchise opportunity which can then be further explored, should the potential franchisee be interested in taking his or her enquiry to the next level.

What do you do now? Which one is going to be the right one for you? Is there a market for the franchise you are looking at? Can you afford it, and can you make enough money to make it worthwhile?

Buying a franchise does not guarantee your success so it’s vital you do as much as you can to research what could lie ahead. The more due diligence you do, the better chance you have to finding the “right” franchise model for you and the better chance you have for success.

Investigating Your Options

Regardless of whether you choose to buy a new franchise or buy an existing franchise, research is the single most important activity in making your decision. Without adequate information, you could be making a very costly decision, effecting the rest of your life. Below is an outline of the advantages and disadvantages of buying a new franchise or buying an existing franchise which might assist you in your search and decision. Either way buying a franchise has some definite advantages and disadvantages and these should be evaluated before deciding to purchase one.

Buying A New Franchise

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Buying An Existing Franchise

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Overall Advantages of Buying a Franchise

Consumers today are becoming more brand loyal which means your chances of being success in business could simply rest on the fact you belong to a strong brand in the marketplace

Owning a franchise allows you to go into business for yourself, but not by yourself.

A franchise provides franchisees with a certain level of independence where they can operate their business.

A franchise provides an established product or service which already enjoys widespread brand name recognition. This gives the franchisee the benefits of customer awareness which would normally take years to establish.

A franchise increases your chances of business success because you are associating with proven products and methods.

Franchises may offer consumers the attraction of a certain level of quality and consistency because it is mandated by the franchise agreement

Franchises offer important pre-opening support:

  • site selection
  • design and construction
  • financing (in some cases)
  • training
  • grand-opening program

Franchises offer ongoing support

  • training
  • national and regional advertising
  • operating procedures and operational assistance
  • ongoing supervision and management support
  • increased spending power and access to bulk purchasing (in some cases)

There are of course some disadvantages to buying a franchise and the most important one to look out for is if other franchisees are performing poorly or the franchisor runs into unforeseen problems then it can damage the overall system and image of the company.

Let’s have a closer look at some of the important areas you should consider when choosing a franchise.

Your Passion!  Where Do Your Interests Lie?

With over 900 franchise systems within Australia alone, it is important that you gather as much information as you can about the types of franchising opportunities that are available and what they have to offer you and to the market or end user (the customer). Have a clear idea of where your interests lie and what areas you are passionate about, as this will help you eliminate some franchises in industries that just don’t interest you. You should start a business in an industry that you will enjoy for the next 10 to 15 years.

Making the correct choice of industry is the foundation for success.

Ask yourself:

  •  What do you like to do? (interest and hobbies)
  •  What do you know how to do? (experience)
  •  What do you do well? (special skills and talents)
  •  Which industry(s) involve your interests and use your skills and talents?
  •  What products or services could you sell in this industry(s)?
  •  Would you rather sell a product or service?
  •  What products or services would you like to sell the most?

Determine If There Is a Market

Before purchasing your franchise, determine if there is a market for the franchises product or service.

  • How many potential customers are in your area?
  • Will your product or service sell?
  • What need does it satisfy?
  • What problem does it solve?
  • What trend or fad does it address?
  • What should the appropriate pricing be?
  • Who are your competitors?
  • How many competitors do you have?
  • What do they offer?
  • How will your product or service be unique?
  • What marketing niche can you capture?

A Fully Informed Decision Is a Good Decision

Like starting any business, buying a franchise involves a risk. Studies show that successful franchisees:

  • conduct their own marketing research
  • use their own financial and legal advisors
  • develop thorough marketing and business plans
  • have prior work experience

As a prospective franchisees the more time you devote to researching the franchises available and evaluating the strength of the franchisors, the happier you will be in your decision.In order for you to make any decision about entering into a relationship with a franchisor and becoming one of their franchisees in the network, it’s important you are in a position where you can make a fully informed decision about whether it’s right for you, or not.  Reading an information pack just isn’t enough. Think about areas such as the company’s vision, philosophy and values. Are they in alignment with your values, and are you comfortable with what their products and services offer the marketplace?

It amazes me that many people make a spur of the moment decision about their future and their next 10 or so years. A franchisor does not need a license to become a franchisor, so how do you know if your investment is safe?

A great place to start is to investigate the franchisor’s history:

  • How long has the franchisor been in business?
  • How many current franchisees are there in the network?
  • What is the failure rate of the franchisees?
  • Are there any pending or past lawsuits and what have they been for?
  • Does the franchisor have a reputation for quality products or services?
  • What is the franchisor’s financial health?
  • What are the earnings claims and profit projections? On what are they based? Are the projections based on franchisor or franchisee-operated units?
  • How long have the franchisee operated units been used for projections been in business?
  • What is the background of the principals/management? What is their business experience? Have they personally had any bankruptcies? Have they personally had any recent litigation?

Transparency

Transparency is another important ingredient to the decision making – due diligence process. The more open the franchisor is, the more you can find out whether it’s the right fit for you.

  • Is the franchisor open when communicating the business model to you?
  • Do they offer you the opportunity to speak with other franchisees?
  • Are you able to meet the franchise support team?
  • Do you have the ability to review the operations manual and possibly sit in on a training class?
  • Have you the opportunity to work in an existing franchise for a couple of weeks and really get to know the
    • System
    • Manuals
    • Training program
    • Support
    • Earnings potential

Speaking with current and past franchisees is important as it allows you to get a general idea of their experience in the business and what it’s like working within the franchise network. Hearing a franchisees’ prospective (make sure you speak to a few and not just one), is a fundamental part of your due diligence and you get an idea of what to expect and what the culture is like and what the franchisor is like from a Franchisees’ prospective.

Speaking with franchisees that have left the system and finding out why they left gives you more insight into the franchise. Be sure you contact more than one so you can average out the responses. Not everyone’s going to be right for the franchise and a few will leave the system either because they were asked to or because they failed to do their proper due diligence initially and realised it just wasn’t for them. So ensure you speak to more than one past franchisee.

When speaking with or visiting existing franchisees, try to cover areas like:

  • The level of training
  • The quality of products or service
  • The level and promptness of support
  • The operations and quality of the operations manuals
  • The earnings potential/claims
  • Any problems or difficulties with the franchisor
  • Franchisor-franchisee relationship
  • Level of franchisee commitment

Franchisor-Franchisee relationship

How does the franchisor treat the franchisees in the network? This is an important area to ask questions about. Ask current and past franchisees as well as the franchisor. The ideal situation is if the franchisor treats it’s franchisees with the respect, as fellow business people who are in business to achieve profitability and mutual success. You will find yourself in a much safer and more successful environment and network if this is the case. Franchisees who are who are respected as fellow business partners are more likely to respond to the franchisor like switched on business people motivated and ready to seize opportunities and deliver products and services to their local area as best as they can. They are proud to get out into the local market representing the brand they belong to.

Commitment

Is the franchisee committed to the franchise? A franchise offers strength in the market place in the brand as well as in the numbers of the network. How committed is the franchisor to ongoing support and training? You can find this out just by asking a few current franchisees. Is the support and training broad which means it not only offers business operation training and support they provide much broader support and training which covers all key areas of business along with offering management resources, support and advice.

Franchise Agreement and Disclosure Document

Carefully study and obtain professional advice concerning the franchisor’s Disclosure Document and Franchise Agreement paying special attention to:

  •  Costs including franchise fee and fit out fee
  •  Term (duration of) agreement and renewal provisions and conditions
  •  Termination clauses
  •  Franchise territory
  •  Procedures and restrictions
  •  Training and assistance
  •  Earnings potential – gross sales, net profit
  •  Expansion plans
  •  How fast do they plan to grow?
  •  Where do they plan to grow?
  •  Do they have a business plan for your area of location?
  •  What is their analysis of the competition in your area?
  •  How many units are being planned for your area? Why that many?
  •  How much is going to be spent in regional advertising in your area?

Let’s expand on a couple of these key points.

Franchise Fees

One of the most common questions is how much does it cost, and what are the other fees I have to pay? Every Franchise system is different. You will more than likely find a general overview of the fee in the information pack and you can find out the full list of fees payable, both upfront and ongoing, in the Disclosure Document. The fee will vary depending on the maturity of the business and the complexity of the system.

Upfront Fees: Before you start your new franchise, there will be an upfront fee payable to the franchisor. This is the fee to enter the system and gain the right to use the intellectual property including the system and brand name. Most will also require a training fee to be paid which will cover the initial training provided to you so you have the knowledge and the skills to operate your business from day one. Some franchisors will also ask for an upfront marketing or initial promotion fee which is used to promote your franchise in the local area during the initial launch period.

Royalties / Ongoing Fees:

Royalty is the most common word used for the ongoing fees that are payable to the franchisor. This fee usually covers business, management, technical and marketing support. These fees vary from franchisor to franchisor. Some base their fees on turnover whilst others set a fixed amount. Some franchisors do not charge an ongoing support fee at all; instead they earn their income from the sale of their products to franchisees, which the franchisee then sells to their customers. Usually these products are exclusive to the franchise system and can only be purchased direct from the franchisor.

Marketing Fees:

Marketing fees are collected by the franchisor to go into a marketing fund or marketing pool. This allows the franchisor to market the brand for the benefit of all. This generally is a fixed fee or a percentage of turnover. Not all franchisors require you to pay into a marketing fund. Please check the franchisors Disclosure document for this. Be aware that you will still be required to pay for your own Local Area Marketing for your franchise.

Fit Out Costs:

The fit out fee is commonly included in the total investment set by the franchisor. This is known as a “turnkey” solution where by the franchisee can sign the agreement, attend the training and then commence in their premises with everything ready at their fingertips to operate the business. Where the fit out costs are not included as a total investment the franchisor will give the franchisee an estimate to fit out the site. Every site will be different so these costs will vary from site to site. Fit out is done in the most cost effective manner and in alignment to the design and layout standards.

Training:

The initial training provided to new franchisees is a vital ingredient to the success of the franchisee. For many new franchisees, this is the first time they have been in business for themselves so it’s important to ask what’s included in the initial training. From my experience training that includes the operations of the business, use of the system as well as other management and marketing processes sets a more solid foundation for success. Assisting franchisees in areas such as marketing, bookkeeping, staff recruitment and training, quarterly planning and so on will increase the chances of overall confidence in the business which will ultimately lead to a higher chance of success.  The more proactive franchisors provide the services of a franchise coach to assist the franchisee in all key areas of business.

Support:

Ongoing fees are charged in return for a certain level of support provided to the franchisee. It is always a good idea to ask what level of support is provided and what is included in this support. Does the support cover all key areas of business or just the franchise system?

Obtaining independent legal, accounting and business advice before signing any binding documents is absolutely essential!

In Summary:

Before buying any business, you must carefully consider many factors that are critical to your success:

  • costs
  • training and support
  • your abilities
  • franchisor’s experience
  • demand and competition
  • expansion plans

Brand Name:

How well known is the franchise name?

Does it have a reputation for quality?

Have any consumers filed complaints against the franchise? If so why?

Costs:

How much money will this franchise cost before it becomes profitable?

Can I afford to buy this franchise?

Can I make enough money to make the investment worth my time and energy?

Training and Support:

What kind and how much training and support does the franchisor provide?

Do existing franchisees find this level of training and support adequate?

Your Abilities:

Do you have the technical skills or experience to manage the franchise?

Do you have the business skills to manage the franchise?

Is the franchise of interest to you?

Franchisor’s Experience:

Has the franchisor been in business long enough to have established the type of business strength you are seeking?

Demand:

Is there enough demand in your area for the franchisor’s products or services?

Is the demand year-long or seasonal?

Will the demand grow in the future?

Does the product or service generate repeat business?

Competition:

How much competition do you have, including other franchisees?

Are the competing companies/franchises well established?

Do they offer the same products and services at the same or lower prices?

Is there a specialty or niche you can capture?

Expansion Plans:

Is the franchisor planning to grow at a rate that is sustainable? Part of your due diligence when considering which franchise network to invest into should include looking at the individual success of the franchisees. Have a look at what individual franchisees are achieving. Has the franchise met all their expectations and if not where has it fallen short.  Do you have the ability to own multiple sites within the franchise network?

Obtaining independent legal, accounting and business advice before signing any binding documents is absolutely essential!

If you are making the decision to get into franchising, your success will be determined by the level of due diligence to do, the level of understanding you have gained of the franchise business and the level of commitment you are willing to give to your success. Your future success and prosperity will also largely depend on how well the relationship between the franchisor and franchisee is managed.