Take advantage of these financial mastery tips from your ‘Franchise Bible’ coach.
Grow Your Business, Not Your Inbox
Stay informed and join our daily newsletter now!
4 min read
Opinions expressed by Entrepreneur contributors are their own.
At this point in the Fight for Your Franchise Challenge, we are now focusing on real-world strategies to gain forward momentum to launch you into the future. This week, our topic is for your financial and legal department (remember the franchise equation from week five?)
One of the common issues that I see in my coaching practice is lack of focus on the financial department. Many franchisors and franchisees tend to be marketing– and sales-minded entrepreneurs. This can create a company that is heavy on marketing, sales and growth, but light on financial discipline. This situation can be catastrophic if not balanced out. The Franchise Equation strategy pointed out that the ultimate goal is to reach the Zenith level in all five departments. This naturally includes finances.
Related: Fight for Your Franchise Challenge, Week 7
I often say, “It is not how much you make. It is how much you spend.” I have seen companies with millions in annual revenue that never show a profit. That is the hard way to lose money. Many times, we are able to evaluate a company’s financials and then adjust to increase efficiencies and profitability.
Here are some money-saving tips you can implement in your business:
Have a financial plan. Many business owners simply do not have a financial plan and manage their business from the check book. This can be like pouring water into a bucket with a big hole in the bottom. You can develop a robust financial plan and include a budget and projections.
Create short, medium- and long-term goals and KPIs. It is a good idea to create departmental goals and KPIs so you can strive for the Zenith level for your business.
Avoid the temptation to create a top-heavy infrastructure. Many business owners get ahead of themselves and take on too much overhead in the early stages. This occurs for various reasons, including overly optimistic projections. I have seen many franchise organizations fail because they got too top heavy and collapsed under the financial strain when they didn’t hit the projected revenue.
Fine-tune on a regular basis. Schedule regular meetings with your financial team to review your financial plan. Make the necessary course corrections before small problems become big problems. Many business issues can be solved if they are caught early. If you don’t review your plan, you may wait too long to adjust.
Continue to evaluate, adapt and overcome. You will always face new financial challenges in your business. Use this strategy to face them head on and be agile enough to adapt and overcome.
Wealth management is an area that I want to encourage every business owner to investigate. I have witnessed many entrepreneurs run hard to the end of their businesses only to find no retirement plan. Most of the time this is due to the entrepreneurial spirit that compels us to believe that next year will be the big year or the next big deal is right around the corner. The other reason is the hope that someone will be interested in buying our business for millions of dollars at just the perfect time for us to retire and buy that beach house and sailboat. Unfortunately, selling existing businesses can be very challenging even under the best of circumstances. This is one reason that you see children take over the family business. I suggest that you start a wealth-management plan as early as possible to prepare for the future.
Related: Fight for Your Franchise Challenge, Week 6
This week on our Franchise Bible Coach Radio Podcast with Rick and Rob, our guest was Sean Manning, founder and CEO of Payroll Vault Franching in Denver. Sean is a successful franchisor as well as an expert in financial business planning. You can listen to the entire podcast by joining the fight to receive your free weekly emails. Sign up now at www.franchisebiblecoach.com.
The Fight for Your Franchise coaching videos are now hosted on Entrepreneur.com and you can subscribe for free. This gives you access to our content as well as other great resources offered by Entrepreneur. Click here to set up your free account.
Let’s focus on gaining momentum to not only survive, but to thrive. And remember to keep fighting the good fight!