5 Things That Could Be Preventing You From Expansion

Caity Wynn

Caity Wynn

Product Marketing Manager

April 23, 2018

5 Things That Could Be Preventing You From Expansion

Caity Wynn, Product Marketing Manager
April 23, 2018


For a franchise owner, there’s nothing more satisfying than a healthy profit margin and happy customers. However, staying on the safest path might mean you miss the ideal time to expand, and  It’s possible you could be avoiding growth because of the potential risk. Here are five things that could be preventing you from expansion – and how to overcome them.

  1. Poor communication

Being spread too thin across multiple stores is a common pain point for franchise owners, especially those in the hospitality industry. But a more insidious issue is poor communication – and it can invade almost every part of your business.

If you think you’re ready to expand, put aside thoughts of profit margins and inventory management for a moment. Consider how well you communicate with your current stores, and ask yourself the following questions:

  • How often do you conduct one-on-one catch-ups?
  • Is everyone on the same page for the coming year?
  • Will spending extra time on expanding into a new area negatively impact the people who are already on your team?

Improving workplace communication should be your first goal before trying to expand.

  1. Not understanding your customers – or competitors

Is your customer base mostly made up of regulars or one-off purchases? Do you understand the needs of customers at different stages of the buying journey? Have you invested time and money into analysing your competitors so you can leverage off their shortcomings?

If you don’t understand the needs of your customers and the strengths of your competitors, expanding into new areas could be disastrous. First, do your due diligence to get a better picture of your audience and competition. Then take advantage of customer analytics, like time spent in your stores, conversion rates of your e-commerce pages, and whether there are any noticeable seasonal trends you can use to your advantage.

  1. Lack of funds

Much like being spread too thin across multiple stores, nothing kills expansion faster than poor cash flow. It’s no surprise that well-funded start-ups outperform those with inadequate funding, and the same is true for franchises looking to expand.

While there’s a lot to be said about taking initiative at a grassroots level to grow your business, the hard truth is that attracting investors, increasing production, opening another store and even implementing new marketing strategies all require appropriate funding.

Taking out a small business loan or getting investors on board could be the solution you’re looking for. If this is the case, you’ll want a strong growth strategy to wow the people in charge of your funding. Another option is to delay the expansion until you’re back in the black. Whatever you decide, getting the funds sorted before expanding is the only path to success.

  1. A bare-bones growth strategy

Having the proper funding for growth is great, but it’s only one piece of the puzzle. Doing research is equally – if not more – important for ongoing success. As a time-strapped franchise owner, it’s worth investing whatever free hours you can spare into developing a solid growth strategy for your business.

The first item on your to-do list should be to develop a sustainable and actionable growth strategy – one that aligns with your franchise goals and level of funding. Getting help from the best in the business – like financial advisors or entrepreneurs who’ve had success in your industry – can provide you with expertise and confidence moving forward.

  1. Time

Growing a business takes time – a lot of it! And for franchise owners it’s a commodity you are already short on. But thankfully we now live in the digital age. There are countless workplace solutions available that can streamline mundane activities and give you back a few hours every day to invest in your expansion strategy.

Need to roster team members across multiple locations? Do you spend half a day every week tracking employee hours and manually inserting data into your payroll system? Online workplace solutions could be exactly what you need to focus on the growth of your business.

 

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Important Notice
The information contained in this article is general in nature and you should consider whether the information is appropriate to your needs. Legal and other matters referred to in this article are of a general nature only and are based on Deputy's interpretation of laws existing at the time and should not be relied on in place of professional advice. Deputy is not responsible for the content of any site owned by a third party that may be linked to this article and no warranty is made by us concerning the suitability, accuracy or timeliness of the content of any site that may be linked to this article. Deputy disclaims all liability (except for any liability which by law cannot be excluded) for any error, inaccuracy, or omission from the information contained in this article and any loss or damage suffered by any person directly or indirectly through relying on this information.


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ABOUT THE AUTHOR
Caity Wynn
From the small improvements to the big new releases, Caity can give you the low down of everything that's moving and shaking on the Deputy platform.
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