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.
- 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.
- 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.
- 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.
- 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.
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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