Franchising is a great way to start a business and earn money with the assets of an established corporation. By opening a franchise, you benefit from existing customer loyalty, trust, and a good range of product offerings. However, it’s important not to think that franchising is easy just because the business behind it is already established. In fact, these that new franchise owners often overlook can spell financial disaster if you don’t mitigate them properly. Follow these tips, and you could be well on your way to franchise success.
Fleet Management
Fleet management is an important consideration for many aspiring franchise owners. If you plan on directly to customers homes, then you will need to have a solid fleet management plan in place prior to opening your business. Don’t mistakenly assume that your franchise company will handle everything for you. In fact, they will expect a plan from you before you open for business. You can impress your shareholders by taking a modern approach to your fleet.
Electric vehicles are more energy efficient, have a range of 100-300 miles per charge, and can reduce operating expenses without cutting corners on quality or ability to fulfill demands. Before you invest in vehicles, you should also forecast potential management expenses. In addition to fuel or charging stations, you’ll also have to consider miles per gallon or charge, maintenance costs, and insurance expenses. You should also consider leasing vs. buying commercial vehicles. In many cases, it can be more economical to start off by leasing and then later investing in cars that you know work well for your business.
Inventory Turnover
Inventory turnover is a metric that represents how long it takes for your franchise to completely go through and replace its inventory. A high inventory turnover rate is good, because it means that you’re selling your products quickly and replenishing them just as fast. A low inventory turnover might indicate overstock, which is something that new franchise owners are frequently guilty of doing because they’re afraid of running out of products.
Use franchiser data to predict customer demand prior to opening. You should also start small, stock lean, and only replenish your inventory as needed. Pay close attention to the rules that are already outlined in your franchise system regarding inventory management. There may be stalking practices that you have to follow, or a certain quantity of goods that you need to always maintain. There are also rules on how to handle obsolete inventory, so make sure that you are doing everything in your power to avoid overstocking and wasting money on products that aren’t going to sell or that have an expiration date.
Marketing
Even though you belong to a brand, you are still an independent business, which means that you need to show your employees they are valued, know your target audience, and put effort into marketing to local customers. One of the biggest mistakes you can make is assuming that business is going to be booming as soon as you open the door just because you are part of a franchise. Yes, being part of a recognized brand undoubtedly attracts customers. But what will really help you grow?
Be able to create your own individual social media account or website depending on what franchise you’re a part of. franchise companies usually set rules and restrictions to help prevent unhealthy competition between individual businesses. However, there will still be opportunity to attract new customers using permitted signage, promotions, and of course, stellar customer service. Direct mail is a common marketing method for franchise businesses that can help reel in new business. Announce your opening with flyers, handouts, posters, and anything else you’re allowed to use. Doing so can be relatively inexpensive but highly effective.
