What do I need to do in order to make money as a franchise operator?

Written By Steps To Faculty Published June 25th, 2010

Being a franchise operator can be a scary time in a businessperson’s life: everything is new, the pressures of running the operation now fall upon your shoulders, and the hours are inevitably long and arduous. Happily, there are a few key steps that can allow you to make money as a franchise operator so that the long hours become much more enjoyable.

Step 1 Have a business plan in place from the start

Once you have found the money to buy up a new franchise, the next step is taking that franchise to a higher level; this can be quite a difficult matter unless you have a clear set of guidelines and objectives in place. Most of all, what you must do is to have a business plan in place that gives you a set of benchmarks and a set of clearly-defined goals – and how you will reach those goals – that will enable you to operate the organization efficiently and progressively. You should have a realistic goal in place for how much money you want to make each month, each quarter, and each year; you should have a set of benchmarks or objectives in writing that will guide you towards your financial objectives; and you should have a business plan that indicates what steps will be taken – and how much those steps will cost in terms of time and money – in order that you will reach each successive stage or objective. The truth be told, you should have a business plan of some kind already formulated even before you make a purchase of a new franchise, for the daily pressures of taking over an outlet can be quite overwhelming.

Step 2 Do an inventory to get rid of unnecessary overhead costs

When you first take over the franchise, you must immediately do an inventory to see what is working, what is not, and what is superfluous. Look at the operation and see what services are making money and which ones are not making money – or not enough money. Also, look at whether or not the resources of the operation are being used sufficiently; for example, if you have three stoves and one is never used, do you still want to have that extra stove? How much is it costing you to maintain each month? How much will it cost to upgrade in the future versus simply bringing in a new stove in the future? And how soon do you think it will be before the outlet grows sufficiently that the stove can actually be made useful? These are important questions and these are questions that have to be asked immediately; as much as possible, you want to cut down on energy use, on the use of space, and you want to cut down on the number of people who will be employed at the franchise. The objective, ultimately, is that everything in the store must be put towards productive use or you do not need it.

Step 3 Review the marketing plan at the very beginning

Oftentimes, when people put a franchise outlet up for sale, they do so because their sales are down and because they have lost sight of their target demographic; conversely, maybe the demographics of the local area have shifted and they have not adjusted accordingly. Given this, you must have a marketing plan in place for your operation from the start. You need to ask yourself which groups tend to patronize establishments such as yours; you need to ask what sorts of products they like; you need to know what sorts of lifestyles they lead; and you need to find out which modes of communication will reach them the fastest and the most effectively.

At the end of the day, the best way to find success is to have a plan in place, to know where you need to cut costs, and to have in place a marketing plan that targets the right groups. These are three simple steps, but successful businesses are based on following simple steps.

Roger Due

Investing in Your Destiny® & Coaching Program - Wealth Building Summit Dallas, Texas

My name is Roger Due and I am from Albuquerque, New Mexico and I am the owner of the Monsano software company. This has been an absolutely fantastic conference. This is the best I have ever been to.