The last installment of this series is focused on lending and operations, and their importance in driving value in the business. In the first three articles, we focused on the overall value drivers in the business and then broke them down into the first two core value drivers of leadership and relationships. There is no question that leadership and relationships are the most critical value foundation of the business. However, the other two pillars are just as important to driving value in your multi-unit franchise organization:
Banks are going to want to know how strong your business is before they choose to invest in it (and you). When it comes to banks looking at the value of your franchise operation, they take into consideration subjective conclusions of borrowing capacity based on various criteria, including the three V’s of leadership:
It is important to understand that the bank’s impression of the business mission, strategic plan, character, competency, commitment of management and ownership continuity as they generally reflect on the bank’s confidence in your long-term business plan.
As with lending there are a variety of areas that impact and affect the operations of the business. At the top of the list is owner motivation and perspective because it drives the reason that you are in business in the first place. Your view, as the owner, determines the planning, direction, and future of your franchises. Therefore, there are four components that should be considered to ensure you are running your operations in the most productive and effective manner to drive revenue:
How an owner prioritizes needs, is how they define and prioritize success and sets a tone for organizational culture. As such, cultural undertones driven by the owner’s perspective impact operational productivity and efficiency. To figure out where you fall, consider what drives your business decisions?
When we look at the four pillars for business value – leadership, relationships, lending, and operations - the business cannot stand strong without all of them working together. A weakness in one of these pillars undermines business value and success. It is important as a multi-unit franchise owner to understand the four components and how they work together in unison, building value in your business.
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