Financial Guidelines: 6 tools that can help you boost the bottom line
Company Added
Company Removed
Apply to Request List

Financial Guidelines: 6 tools that can help you boost the bottom line

Last time we looked at how unit economics offers a progressive strategy for tracking and managing costs and revenue at franchise locations. It's a tool that has become a necessity to many savvy franchisees, and it's a tool that should be in place from day one.

Unit economics strategies not only help business operators run lean and mean business machines, but – as briefly mentioned previously - they also help them when the time comes to borrow money from lenders. Keeping a close eye on expenses and revenue – and all the variables affecting those all-important numbers – is simply a smart strategy.

Steve LeFever has been both a professional banker and a successful entrepreneur. His years in the business world have given him a unique perspective on financial analysis, business management, and practical business decisions. He's the founder of Business Resource Services (BRS), a consulting firm that provides financial management education training, network benchmarking, performance group facilitation, and bookkeeping services to the franchise community.

LeFever understands the importantance of unit economics strategies and he has created a checklist of financial tools that can help a new – or established – franchisee boost unit performance numbers. He boils it down to six key components:

  • Chart of accounts
    A standard chart of accounts is essential for every franchisee. Work with your franchisor to get one or create one. It's worth it because a consistent recordkeeping format keeps everyone "on the same page" and paves the way for productive comparative analysis.
  • Financial statements and bookkeeping
    You should keep your books in order—either internally or by outsourcing to a qualified financial accounting firm. Without timely, accurate data, no organization knows its status, and sharing data is impossible.
  • Create a performance "scorecard"
    A one-page financial report card that tracks key profit and cash drivers is the most effective action step you have to introduce and maintain focus and accountability. You and your managers should all understand how to read it and use it—and be held accountable. Together you can measure—and improve—performance.
  • Benchmarking
    Every network of businesses should benchmark itself. You can do this among all of your units, or by examining system-wide benchmarks if the franchisor provides them. These profiles of both median and top performers not only create yardsticks of performance, but can also produce a "best practices" environment that is extremely effective in creating a culture of accountability and performance.
  • Know your costs
    In this tight economy, it is an absolute must for franchisees to know their costs. A break-even analysis is absolutely the most valuable financial management tool available. Make sure your managers and any other key people know how to calculate and use a comprehensive break-even analysis. When it comes to cost analysis, you must be able to trim with a scalpel, not a hatchet.
  • Franchisor support
    Ask for—and use—whatever financial assistance tools your franchisor supplies. Train your managers in financial analysis and expect them to be able to use all the tools listed above to assist each unit in performing a strategic assessment of the business.
Published: August 12th, 2010

Share this Feature

Potbelly Sandwich Shop
SPONSORED CONTENT
Potbelly Sandwich Shop
SPONSORED CONTENT
Potbelly Sandwich Shop
SPONSORED CONTENT

Recommended Reading:

Comments:

comments powered by Disqus
Right at Home
SPONSORED CONTENT

FRANCHISE TOPICS

810 Billiards & Bowling
SPONSORED CONTENT
Conferences
Caesar's Forum, Las Vegas
APR 25-28TH, 2023

Featured Opportunities

MassageLuXe
MassageLuXe® is a fast-growing massage franchise providing massage services to clients, primarily through multi-unit area developers & single...
Arby's
Fast Crafted® Restaurant Brand Specializing in Freshly-Sliced, Deli-Inspired Meats & Sandwiches 
American Family Care
With more than 270 active locations in 29 states and dozens more in development, American Family Care is America’s #1 Urgent Care Franchise.
Hungry Howie's Pizza
Hungry Howie's is currently EXPANDING! Top Markets are available for single or multiple unit development. Get the EDGE over the competition with...
Perspire Sauna Studio™
The hottest new franchise is here (literally 150°). Perspire has developed, formulated and tested the most superior infrared sauna studio model...

Share This Page

Subscribe to Our Newsletters