Now that you have a proven concept that the audience receives well, you may want to turn your brand into a franchise. Sky Accountants give tips on franchising.
Should you turn your business into a franchise?
When you have successfully established your business, with customers and profits growing year after year, it could prove you have a “winning formula.” Now that you have a proven business concept, you may want to turn your business and brand into a franchise. A couple of our clients here at Sky Accountants have gone down this path. One in the hospitality industry and another in the allied health industry. Both had “extra ordinary systems” and business concepts. This meant they could scale the business model they had developed.
A franchise is a process of selling the rights to a brand and business concept to a third party, who will operate as an independent business, shop or store. What are the benefits of becoming a franchisor and is your business ready for it?
To find out if franchising can work for your business, you should consider whether or not your brand is already established as a niche business and has a proven track record of being profitable. Engaging a market research company can be helpful with this process. Ensure your business model delivers longevity and has the ability to be replicated in several locations.
An established brand is one that has been in the market for a minimum of three years with maintained profits and customer relations. To successfully franchise, your business model has to be consistent and reliable based on recorded facts and figures.
To attract a customer base, your brand should also feel fresh and new by being a “niche” business. Find out how your business differs from others and if it will still be unique in a few years’ time. It’s important to look ahead as changes in technology can have an impact on some businesses. ‘Blockbuster Video’ is one example.
You should also be able to prove to potential franchisees that they can absorb the franchisor costs, normally royalties and marketing expenses, and still turn a profit.
To ensure longevity, you should also have plans and strategies in place. Set targets for the first half of the year and have a game plan for investors and staff looking over 1 to 5 years. It may be best to consult with professionals about franchising and organise all the legal aspects and disclosure agreements so you are fully prepared.
Your first business was a success, but how do you know if new crowds will receive your brand just as well? This needs research and careful planning. Think of your customer’s demographics.
Consult us to know more about expanding your business and find out whether or not you should delve into franchising. Sky Accountants can help you overcome the barriers to growth. Click here to speak to experts who specialise in small business consultancy in Ballarat. We are big believers in the use of professional tools to manage your business. The right tools can streamline your processes so that the business is best placed to trade profitably.
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