Tamworth couple Dan and Natalie Urquhart are award winning franchiseses, achieving a top turnover of $12.9m. Here Dan shares their tips on successful franchise finances.

When we signed up to the franchise in 2007 (G.J. Gardner Homes, part of the Colour Capital Group) we really didn’t come with any preconceived ideas. I had been a supervisor for the company for three years when the opportunity to buy the business came up. We knew it was a great business and that if we put in the hard work, and maintained high quality workmanship the results would come.

The first challenge is funding the purchase. Natalie and I raised capital ourselves and also had a number of silent private investors. We have since paid these investors out.

Once you’re in business, cash flow is always the biggest area to manage. You can’t always ensure a steady flow of work, so you have to manage income carefully and ensure that there is always money in the bank and that the budget versus actuals are in line with forecasts.

We have plenty of goals we aim to achieve but one of the key targets is the number of homes built each year. Our goal has always been 40 homes and it has taken us seven years to hit this prime target. We reached 49 last year and it was a very satisfying moment for us.

Financial indicators

Client satisfaction is integral to our long-term success so we compile customer care reports on all of our clients and aim for a ranking of 95 per cent or higher. We monitor our financials generally on a monthly basis.

Slab down is a term in construction for laying the first foundation stone in a building and along with sales targets, slabs are a major measure of our business performance in regards to predicting our financial forecasts. We set and monitor cash flow and profit forecasts based on these targets.

But we don’t run this business just by ourselves, so when it comes to staffing and performance, we set key performance indicators (KPIs) for our staff in regards to their roles including sales and leads.

Of course as the business developed, we needed to make changes to the way we ran the operation.

And staff management was the biggest thing we had to get right.

We have grown our team to 10 staff and as a result needed to clarify roles and goals. We put in place job descriptions and KPIs for staff to ensure we could hire and manage performance effectively.

We also had to establish good management practices such as regular team meetings and incentive packages for staff.

Early on we realised how important training and motivation are for a team and we have to maintain our focus as leaders of the business.

Could we have done anything differently to boost profitability? There’s always room to do better and consistency in regards to sales and slabs down is one of the main areas we have worked hard to improve. Meeting sales and targets is so important in regards to maintaining profitability.

It has taken us some time to build and maintain a strong sales team and management system. It all takes time and hard work.

Money tips

The best financial advice we were given is cash is king, so manage cash flow very carefully.

• Be conservative with your spending.

• Concentrate on your greatest assets…your customers, trades, suppliers and staff. Without great relationships in these areas we don’t have a business.

• Tightly manage sales and make sure the lead pipeline is full.

• Watch overheads carefully and employ the right people for the right positions.

It can be hard and time consuming but the right team is essential for you to be able to achieve your goals. You also need to have patience. Everything takes time and success doesn’t come overnight.

A business can only be a big as you are so invest in yourself, your team and constantly upskill and do what it takes.