You have now entered the final step of this blog series! You have signed the contract and are ready to successfully run a franchise business. However, there may still be some questions that you have about what exactly that means. When can you start operating? How long until you see a profit from the franchise? Training? Expansions? This last section will touch on these questions and a few more that you should know when running a franchise business.
The timeline of when your franchise will start operating and making a profit does not have a clear path. This varies from franchise to franchise. You could start operating within a few months or it could take a year to start fully operating. The location, training employees, and branding of the business can all be factors in how long it will take to start operating. Then from the operations, it could take months until you break even on your business. These are questions that you can ask other franchisees while opening your business. They will give you insight into the timeline and what to expect. Becoming a profitable business will also take months after opening. However, this is the reality of owning a business. Once your franchise starts to turn profits it will only be uphill from there on out.
A big factor as to when you can open your business is your employees. Employees are what will make or break your business. You need reliable and hard-working people to help carry out the goals of your business. Some tips for hiring employees for a new business are as follows:
- Post about the job everywhere! Don’t just use job boards but create social media postings and have friends and families share these posts. Social media is a powerful tool when searching for employees, especially when it is a new business. Almost all generations use social media and enlisting family members and friends to put the word out will allow the hiring pool to be more diverse.
- Have an accurate job description detailing the duties, pay, and qualifications. This description will let potential employees decide if they think they are the right person for the job before applying. With a new business in town, many applicants might not know the exact job you are offering which is why the description is extremely important.
- Be prepared for the interview. Compile a list of questions you want to ask potential employees. This will make your life easier if you know who you are looking for as an employee.
After you have hired your team of employees you will need to train them for the job. The franchisor will most likely have training programs that you can utilize for this process. Refer to your franchisor if there are any questions or concerns about the training process and what your employees should expect.
Along with the hiring and training and process of employees, there are a few do’s and don’ts for running a business. On the positive side, you should be taking advantage of all the franchisor-provided resources. Follow the franchise business model put in place by your franchisor, it works for a reason! Utilize the available productivity resources, these will help your business flourish. On the other hand, don’t forget about operational fees. It is suggested that you should put a little more money aside when starting a franchise business. This money will keep your business afloat by compensating your employees, paying taxes, rent, etc. Another “do not” comes in the form of finances. Don’t embellish your finances to your franchisor. There could be more than the initial fees and lying about your financial abilities could sink your business before you start.
Another aspect of running a franchise business is the royalties and revenue. The royalties are based on a percentage of your revenue that you pay to the franchisor as an ongoing expense. The percentage can fall anywhere between five to ten percent. This number is based on the franchise itself. These fees are usually paid to the franchisor monthly. In return for paying these royalties, you continue to use the franchisor's advertisements and tools. This can boost your revenue because customers are familiar with that brand and trust it instantly compared to your own small business. Your revenue will go up by using signs, logos, and the training provided by the franchisor, which in return will keep you from spending extra money. It is a win-win situation where the franchisor gets a percentage of your revenue and you remain financially stable as a business.
With all of this being said an important part of running a franchise business is talking to other franchise owners. They can give you advice and insight as to how they operate and what they have learned along the way. Other franchisees can give more candid answers to questions you could run into while starting your business. They have already been through the process and know exactly how you feel. Use them as a tool to create the most successful business possible.
After all these steps you should now be able to take your franchise business and run with it. Remember there is no straight line or right way to get into the franchising business, the only way is your way. Do the research and find what kind of business you want to own. Franchising is not for everyone, but it could end up being the most rewarding career you chose.