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Ask an Expert
Steve – I know without knowing the ins-and-outs of my franchise that you may not be able to help much, but the fact is I never seem to make enough money. Do you have any suggestions? AJ While the specific problems your franchise may have may indeed be beyond my purview, in my experience, small businesses that fail to live up to their profit potential fall prey to one or more of the following mistakes. Avoid these, and things should hopefully improve. Not following the system: The franchisor set up their system for a reason - it is supposed to work. So make sure you are following it. Also, seek out other franchisees, successful franchisees, and see what they are doing different than you. Success leaves clues. Do what they do. Failure to use your time wisely. I have discussed previously the 80-20 rule, which states, in effect, that 80% of your top results come from 20% of your efforts/customers/actions. I will venture to say that a main reason some franchises do not perform to their appropriate level is because the owner/proprietor does not properly use his or her time; that is, they don't prioritize which of their efforts create their best results. Without knowing who your best customers are or what the best use of your time is, you inevitably waste time on things that don't produce desired results. Failure to keep overhead low. There are three ways to make more money in your franchise:
Businesses that underperform from a financial perspective often have allowed success to creep in and increase overhead; expenses and items that were too much money in the early, lean years are permitted once things get rolling as a sign of prosperity (among other reasons.) But if you want to increase your profitability, you may need to decrease your expenses. Not dancing with the one that brought ya. You got to where you are in business by having a few or many customers who believed in you and liked what you do. But if you don't continue to nurture your best customers, you run the risk of failure. In politics, this is called "alienating your base." Politicians know that they need to have a solid foundation within their party and district to be successful. Once they nail down the base, they can start to look for other voters, but without their core support, those new voters may become their only voters. Nail down your base. Not earmarking enough money to marketing and advertising. The only way new customers will hear about your franchise, by and large, is through marketing and advertising. You simply have to spend enough, above and beyond what your franchisor does, on these vital tools.
About Steve Strauss Need a speaker for your next event? Contact Steve! He is one of the world's leading business experts, a popular speaker on the business lecture circuit, and is sure to leave any audience thrilled. A columnist for USA TODAY, lawyer, and author, his latest book is The Small Business Bible: Everything You Need to Know to Succeed in Your Small Business. Submit your question for Steve Strauss to answer. Please include your name, address, phone number and e-mail address. Selected questions will be answered every other Monday. Ask Steve a question |
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