How to keep your franchise ahead
The majority of franchises turn over between £50k and £249k, placing them firmly in the category of small to medium-sized businesses.
Like many smaller firms, most franchise owners will be feeling the pressure as the economy slows and consumers rein in their spending.
The good news, though, is that such businesses are often able to react to changing market conditions quicker and more effectively than larger and more unwieldy competitors.
According to Mike Dickerson, managing director of the Community Times franchise, which recently won an award for excellence at the 2008 Welsh Business Of The Year Awards, the five key factors to ensure your business maximises the opportunities available in rapidly changing conditions are:
React to the ‘flight
When times get tough businesses and consumers tighten the reins on spending across all sectors. This will typically have the effect of pushing buyers towards lower-cost products and services; witness the sharp upturn of supermarket turnover in low-cost providers Lidl and Aldi at the expense of more expensive providers. If buyers are looking for deals make sure your proposition includes incentives, price reductions and offers that make it easy for them to buy
The major effect of the credit crunch is the restriction of cash and credit to all levels of the market. Cash has always been king in the small to medium business sector so businesses should have a wealth of experience of operating on tight cashflows. If you know cash is going to be tight start talking to your banks and suppliers sooner rather than later as you will be demonstrating that you are analysing and dealing with the situation early rather than panicking and reacting when it's too late
One of the quickest and most profitable methods of increasing cash in the business is to increase sales. As budgets across the business come under increasing pressure make sure that the sales and marketing departments are able to function effectively and deliver cash into the business. Ensure that your sales process is streamlined to deliver sales efficiently, for example, ensure that any information required to complete a sale is available to prospective customers as soon as possible and not stuck in a bottleneck within your business
One of the key advantages a small to medium-sized business has over larger competitors is their ability to react quickly. As the impacts of the credit crunch unfold and evolve, business owners need to quickly gather and analyse market data to work out what is happening in their market and then respond accordingly. Your market may be segmenting into new categories as a result of changing conditions and the first businesses to react will reap the benefits
Take considered action
Deciding how and when to take action in a changing marketplace is a skill that can be forgotten in times of boom. When margins are high and every business seems to be riding a wave of growth the necessity to react quickly and correctly to market conditions can appear less critical. In reality, of course, this skill differentiates winners and losers at all points in the business cycle. Market intelligence, analysis and discussions all count for nothing unless actions are planned, developed, implemented and managed. Develop your plan, execute it and review it regularly
Post Date: August 5th, 2008