Take some tips from an award-winning franchisee. Rowan Prendergast, OPSM Waurn Ponds franchisee, shares his reflections on what he would like to have known when he started out on his franchise journey.
As a potential franchisee, imagine yourself standing at the head of a rushing river, her whitewater sections, frothy eddies and solid rocks beckoning. A whitewater raft lies by your side and your goal is to reach the calm waters waiting eventually at the river-mouth. Now visualise that often turbulent but ever-flowing river as your franchisor business, and your small but buoyant whitewater raft as your own franchise.
Ultimately, you are somewhat reliant on the inexorable rush of flowing water to carry you, but you are the one who determines how you get there. The job is yours to steer your business to take advantage of opportunities that present themselves, and simultaneously avoid the rocks and traps which can halt or slow your progress.
The following are five things I wish I’d known prior to jumping into my own little whitewater raft back in 2012.
1. Your raft is expensive: overestimate the costs
The cost of product, training, marketing, royalties and services is dictated at the sole discretion of your franchisor. Many of these costs can be greater than expected. The sometimes-small margins beyond these costs are where your profits lie. Plan by adding 10 percent to any projected costs.
2. Remember the river ends: actively plan your work/life balance
Define and regularly revisit your personal objectives in running a franchise business. Ensure you are staying on your chosen course down the river, both inside and outside your business. If you aim to build an eventual passive income, then maintain your focus on this goal.
Do not eventually reach the river-mouth to find that family, friends and lifestyle have suffered and melted away in the meantime.
3. Choose your crew carefully: people make the business
The sustainability and growth of your business is inextricably linked to the culture you create amongst your people. Plan constantly to value, grow, train and reward your team. Treat your team the way you want them to treat your customers. Lead by example, but work to build a team culture that thrives without relying on your constant presence.
4. Constantly monitor your raft: develop your own systems for success
You are not buying a successful business, you are buying a river – a brand-name, customer awareness and some support systems. The rest is you and your crew.
Don’t rely on the franchisor to grow your business: plan early to identify holes in franchise systems and develop internal team procedures which complement or exceed those provided by the franchisor. Constantly evolve and innovate.
5. Cash-flow floats the boat
The sometimes cold shock of your business’ numbers is inescapable. Pay your debts on time but grip your cash like a paddle, particularly in the white-knuckled early days. The costs will keep hitting you, often in successive waves. Protect your cash flow by keeping a tight grasp on costs and quickly gaining an understanding of how your cash-flow rises and falls.
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