Tagged ‘Franchise‘

Are You Ready To Open New Stores?

Brian Keen from How to Franchise Simply talks to Renew Design and shares three decades experience working within the franchise industry. We discussed a simple strategy to set your business up for growth.0aeebbc

There are a handful of key ingredients that must be in place before a business is ready to expand. When a business owner first looks at expanding the business, they need to look closely at whether they have the right ingredients to open a new store.

The first one is the demand for the product. You have to make sure that there are enough customers who are hungry to buy your product. Secondly, you have to make sure that the business is profitable. A lot of people go out to franchise because they’re desperate to grow and they can’t grow their existing business because it’s not profitable enough. This should be a warning signal. Lastly, once you know there is a demand for your product and that you can sell your product at a profit, you have to know your business model can handle volume.

Preparing your business for expansion is a process of refining your existing business model. As you move through the stages, you will define and clarify your ideas.

  1. Firstly, you have to design the concept of your business. This is your brand messaging, customer experience, marketing strategy and your organizational chart.
  2. Then you need to define your business model a bit more by developing budgets and your territories.
  3. Once you have a clear understanding of your business model and figures, you can develop the detail of your operations manuals and store style guides.
  4. Finally, you are ready to deploy and open new stores.

Develop the Concept for Your Business

Expanding the business is basically taking what you have done and learnt and starting from scratch and saying;

“How will I change this?”

“What will it be like now?”

You may find you need to eliminate some things because they are not profitable. When you expand, keep it really simple. Most successful businesses that grow have a simple flow to them. Break it down to the minimum.

To simplify the operations of your business, start by putting an organization strategy in place. Usually in a small business, the business owner will be wearing several different hats. Before the business is ready to expand, you need to break it down into different segments. For instance, they may be administration, marketing, sales, production, and so on. You then need to describe very simply what those roles are and then list down the key five or six tasks under each one.

Breaking the business down and understanding the key tasks will form the beginning of the operations and procedures manuals. However, before you sit down and write your operations and procedures manuals you need to make sure everything works as effectively as possible.

Define Your Business Model

Once you have simplified your business model, the next thing you need to do is test your business model. Really look at the processes and expenses for your new store and how this will differ in the new stores to your existing store. Consider store setup costs, suppliers, wages and overheads. Allow for an additional marketing and advertising budget for each store.

For store setup costs, some of those figures won’t be viable when you are doing your preliminary budgets and you will need to revisit them later. Budgets for store fit out will vary for different sites however you should start with a realistic budget figure and refine this as you develop your business model.

Who are your customers? The key thing that most people overlook when opening a second store is understanding the demographics of the area in which you are opening. You need to do some research on the demographics, on the statistics, find out about the profile of the customer you are looking to attract.

There is an idea that is often used in marketing called your avatar.  Your avatar is your ideal customer. Profiling your ideal customers before you set up another store allows to look at the demographics in the new area and see how many of your target customers are in the area around your new store. Understanding who your customer is helps you to define your brand messaging and create the experience you want to offer to your customers. This will affect your marketing messages, the language you use to talk to your customers, and the look and feel of your stores.

Develop an Operational Strategy

Once you have defined your business model and customer, you are ready to document your operations manuals. The purpose of your operations manual is to allow you to communicate and train your staff in the operations of your business.  You will usually need two types of manuals, comprehensive training manuals and quick reference checklists.

In Franchising, it is pretty much accepted that you need to open a pilot store when you open your first franchise.  When you open your first business you still have things to fine tune. You need to test your store design and operational systems with staff. You need to see what works and pressure test your systems to find the holes and the things that you have overlooked.

Open New Stores

In the first few months of opening your new store you will be testing and modifying things. You will test the manuals, equipment, layout and business model to make sure it works as effectively as possible. When you open new stores, you need people who can assume significant responsibility, these may be managers or franchisees. You want them to step up to the mark, not because you’re paying them but because they love being involved with your business.

When you have opened your second store, you need to treat it like a newborn baby. What I mean is, monitor it very, very closely. Bad habits set in quickly, and having a system for monitoring the performance of the business will allow you to have the peace of mind everything is on track.

Expanding your business and opening new stores can be rewarding. Asking the right questions and planning in advance will help to keep the process simple.

Franchising A Retail Business

Expanding your business can be a little overwhelming at first as you go through the growing pains of developing not only one but many successfully businesses at the same time.

How exactly do you start franchising a retail business? Like any undertaking, there a number of factors to consider that will affect your likelihood of success. Demographic, Location, Store Design and Operational Systems are all keys to a successful franchise. However, before you get buried in the detail, the best place to start is speaking with someone you trust to advise you throughout the process.

The first person you should speak with is an expert in franchising, someone who has been there and done it before, and is willing to share their experiences with you. Elizabeth Gillam from Franchisee Success is a franchisee mentor, and a multi-award winning franchisee who can share valuable insights about her own path to success as well as guiding you in the right direction to starting your own profitable franchise.

Draft a Business Plan and Proposal

I’m sure you have heard the old quote “If you fail to plan, you plan to fail”.  Your business plan is the roadmap for your business success. This is where you draft preliminary concepts, budget, team and territory structure and record the Key Performance Indicators (KPIs) that will tell you and your team if your business is heading for profits.

What are your plans for your business? Think of both short and long term goals. Keep in mind that these will be the building blocks of your project. You have to create a persuasive, yet achievable and realistic proposal to pitch to your prospective franchisees.

Store Design, Location and Target Market

Before you create multiples of your existing store design, it is important to make sure the design you are working with is the best possible fit for your store concept, team and customer.

Review and analyze your current store design, customers and layout.

What works well currently? What would you choose to change if you were to design the store again? How effective is your branding and the look and feel of your store in attracting your target customers? Could this be updated or refined? How cost-effective was your store to fit out?

Work with a good retail designer who is experienced in retail design to document and refine the elements that make up your store. Documenting and recording these elements in a brand style guide allows the store to be reproduced consistently and cost effectively for your new franchisees. Our designer Alisa offers a complimentary design strategy session to help you to review your store design and get started on documenting your franchise model.

Create an Operations Manual and Set Standards

Starting a business is never easy – maintaining a successful one is even harder if you do not have rules and guidelines to follow. Creating an operations manual will make your system more organized and your business smoother to manage for you and your franchisees.

The way you do what you do is what makes your business successful. The challenge is fully communicating your way of doing things to your franchisees to ensure they replicate your success. Setting standards and meeting them is one way of maintaining your credibility as a trusted brand.

Listen to the Experts

In order for you to be successful in this line of business, you don’t just have to be hard-working and dedicated; you need to be smart and practical as well. Seeking professional advice from experts will improve your chances of succeeding.

Through the franchise process, there are a number of experts that will help you to stay on track. Consult a financial analyst to go over the cost of the project. Ask an attorney to draft the franchise agreement contracts. Find a good marketing consultant to grow your business. There are also consultants who will walk with you through the process, your franchise consultant and designer will work with you to bring your business systems and dream stores to life. Call Alisa on 0415199466 to get started today.