In this blog I’m going to cover why planning is massively important to your franchise business. By the end of it you’ll know that, and what you need to do to get on with it.
Most small business owners don’t have a strategic plan. They will usually give two reasons for this:
1. “It’s only for big companies”.
2. “I have more important day to day stuff to do”.
But without a strategy, a business lacks the direction it needs to be successful. No direction = going round in circles.
Think of the life of your business as a journey. There’s a starting point, a finishing post and a big chunk of travel in between. Most business owners are good at the setting off bit. They are less good at where they are aiming for, and even worse at the big bit in the middle.
If you set off on a car journey you need to know in advance where you’re going and how to get there. Unexpected road closures, etc. may cause you to take diversions but the end destination remains the same. Business planning is exactly the same.
Here’s five simple steps:
1. Know where you are now. You need to start by understanding your business right now. Profits, cashflow, customers, etc. This is your starting point.
2. Decide personal goals. You own that business for a reason. Its function is to give you the life you want for you and your family. Think about what that means over the long (>5 years) term and short term. This is your personal destination.
3. Decide business goals. To hit those personal goals, you need the business to step up to the plate. Think about what the business needs to deliver to you in order that your personal goals are achieved. This is your business destination.
4. Create your map. You know where you are and where you’re heading for so now create the route to go from one to the other. What sales do you need to generate? What products or services should you focus on? Who are the target customers? What staff will you need? Sounds complicated but it’s actually common sense and really easy.
5. Just do it. A wonderful plan is useless if it just gets filed away. Create some tasks and actions and get on with it. If something doesn’t work – change it. It doesn’t need to be perfect – remember Patten: “A good plan violently executed now is better than a perfect plan executed next week”.
Doesn’t it seem sensible to run your business like that? Figure out where you want to go. Work out how you’re going to get there. Monitor your progress and adjust as necessary. The alternative is winging it, and that’s rarely a route to sustained and controlled business success.
I hope that’s enough to get you thinking about why business planning matters and how to do it. And remember – it isn’t rocket science, it’s basic common sense.
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Chris Martin is a chartered accountant and business advisor and has been helping franchisees create and grow wonderful businesses for over 20 years. He is a published author and has written extensively on franchisee tax issues. He passionately believes that whilst franchising is a deservedly successful business format, franchisees are often let down by their franchisors’ failure to offer support and guidance regarding the financial side of running the business. This leaves franchisees frustrated, overwhelmed and unable to grow their businesses to the extent they should. Chris has developed simple systems, support and guidance to ensure franchisees create businesses that provide them and their families the lives they so richly deserve.