If you’ve been making all the right moves, growing at the right pace, and you’re finally at the juncture in your business’ life to even remotely consider franchising, take a bow: according to the Financial Post, 15% of new businesses fail in year one, and 50% don’t make it past five.
While somewhat imposing, the numbers don’t lie. New businesses are often highly ambitious, eagerly funded, and unfortunately, rushed into the marketplace without the proper strategic considerations figured out. According to the Intuit Canada 2015 Small Business Landscape Study, almost 70% of Canadian SBOs launched their business within six months, while 33% of millennial SBOs launched within just one. You don’t need to become a statistic, however. Here are four steps you can take to scale your business properly and grow well into the future, if you take the time to follow them.
1. Work on bookkeeping
Your business should be a reflection of your passion. Whether you own a pizza restaurant or a shoe store, you likely didn’t start your company to become an accountant. There are two approaches you can take here, either hire someone to handle your bookkeeping or spend serious time learning how to do it properly on your own. Incubators, small business centres, and seminars are frequently held across the country to connect you with these individuals or teach you core skills. Set an accounting standard now, so once more locations open, your books aren’t fragmented from one location to another.
2. Gather, store, and share centrally
Brand standards, training materials, vendor information and invoices, and many other files can get misplaced or otherwise disorganized when some copies exist digitally, some exist physically, and none exist in one given place. Use a cloud storage solution—Dropbox and Google Drive are popular examples—and grant access to key employees, so this information is always indexed, searchable, and ready at a moment’s notice. Rather than waste time tracking down simple, archival information, scan it and store it. You’ll be glad you did come tax season.
3. Either handle operations, or get someone else to
Absentee franchisees, or present franchisees who distance themselves from their companies, set themselves up for failure when adversity arises. No amount of business sense or financial savvy will rescue your business from operational inefficiencies, morale issues, or infrastructure problems. When you are passionate about your ice cream company and your hot water tank bursts, an absentee franchisee has to rely on staff that may not have been trained or present when it was installed, for example, and will scramble to call a plumber or try to remedy the issue themselves. When you’ve committed yourself to your business, you know its ins and outs, and you’re as present there as anyone else, you can handle issues with fluidity and grace rather than closing down while a solution is figured out. If you simply don’t have the time to do this, hire an operations manager or general manager and train them well, so the next time someone hears rumbling in the basement, you won’t have to scramble to fix it when it’s too late.
4. Really think about it
The excitement of franchising can sometimes overtake common sense. Some entrepreneurs may sign on the dotted line long before any of the above criteria are in place or without making sure they are in full legal compliance. All it takes is one big incident during the initial growth stage to derail the entire process, reverse years of success, and damage your brand. We can’t stress this enough: do not rush into franchising your business. Becoming an entrepreneur requires plenty of determination, self-reliance, and courage. Relying on these qualities to franchise is unwise. Ensure that you’re also reaching out to your network of advisors who can provide plenty of free and low-cost services and resources. Once you’re confident that your business model can be taken to the next step, stop by your nearest Scotiabank to speak with a Small Business Advisor.
To learn more about what’s trending in business, like franchising, and to gain insights to help your business succeed, visit the Scotiabank Small Business Insights Centre. Join the conversation on Twitter and get connected to some of Canada’s leading entrepreneurs, all for free.