Three Considerations for Ensuring Your Franchise Future
A recent article, "The Coming Recession: What Lessons Can We Learn in Advance," made a simple, but significant point. We have recessions here in the United States. We don't always know when they are coming, or how long they will last, but one thing is for certain, they happen. And when they do, franchise owners who have not paid attention to historical trends or developed a strategic plan for the next few years can suffer.
The franchise industry is on pace to have one of its fasting growing years in history. In fact, the International Franchise Association reported in August that in addition to the number of franchise establishments increasing by 1.6 percent this year, the gross domestic product (GDP) of the franchise sector will exceed that of the total US GDP. With all of this growth, many owners may not be looking to protect themselves against an economic or consumer shift - or a natural disaster such as Hurricane Maria, Irma, and Harvey.
Planning is one of the ways to ensure your franchise operations are protected against major shifts. Look at where you want to grow, your timeline, your portfolio, and your geography. Just as important as planning for the growth of your operations is planning for your personal growth and security. In addition, understanding and learning from what has happened in the past is also vital to your planning. They all go hand-in-hand and without identifying and planning for both, you might find yourself without a business and without any means for retirement.
Here are three considerations for ensuring you have the proper plan in place:
- Evaluating your motivation and perspective - this shifts from the time that you start your franchise operation. In entry mode, you are thinking one way. In growth mode, motivations are different and when you get to the point of wanting to step back and enjoy life more, motivations shift again. It is critical to understand your own motivations and establish business and personal goals around them.
- Personal financial planning - as your operations shift and grow, so do the impacts to your personal financial planning. Do you know what kind of access to capital you will need should the economy change and negatively affect the performance of your business? This access to capital is not only to secure your potential future, but it could mean "borrowing" from it should the economic or consumer confidence shift downward.
- Management synergy and teamwork - your team is your lifeline to your operations. Do you have the right people in place who can help you navigate a shift that could impact your business goals? Do you have a culture that embodies teamwork so that if needed all will be able to come together to help weather the change?
These are just three considerations to factor into your planning. As an owner, you have to ensure that you have the right balance in place and that you are constantly evaluating the market. Your legacy and the future of your operation are not dependent on the current market environment alone. Do not get stuck in the strength of performance of today. Protect what you have built by paying attention to what has taken place in the past, and what is to come in the future.
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