As we get settled into the new year, everyone has either cast aside their resolutions already (we hope not), are still sticking with them, or are still trying to get them set. If you’re the latter, we’d like to help you add some resolutions to your new business search. FranNet presents the top six things that will kill your franchise. It’s a helpful primer of what not to do once you’ve signed your franchise agreement, had the grand opening and begun on your entrepreneurial path.
#1 – Don’t Spend a Dollar to Save a Dime
Hopefully, you’ve heard the old adage, “don’t spend a dollar to save a dime.” It may have been something your parents or grandparents told you. Essentially, don’t let short-sightedness keep you from making the proper purchases for your business long term just to save a few nickels on the front end. Carefully calculate your purchases for maximum profit.
#2 – Unfamiliarity with your target audience
If you’re selling a specific product or service (and as a franchisee, you will be), it’s definitely in your best interest to learn who your target market is before you open the doors. Have you done any research in your local community? Is there a specific need for your product or service? Is your competitor right down the street? What kind of information can your franchisor provide you about your market or target? Take these considerations and more into account, define your target audience and market to them aggressively.
#3 – Hire the right employees
The lifeblood of your new franchise will be the people representing it to the buying public. Invest wisely in your personnel. A good employee with a strong work ethic and common sense will represent you much better than the guy with the neck tattoo. Take careful consideration of job descriptions, interviews and keep in mind the type of customer you want to attract to your business—they may look a lot like the people you want to be hiring.
#4 – Take your tax liabilities seriously
Nothing can get a company in trouble faster than allowing a tax liability to balloon out of control. Before long, you’ve got additional long-term debt that you didn’t plan for. There aren’t any good excuses that Uncle Sam likes to hear—and generally none that he will accept. Make sure you’re planning in any tax payments into your business plan. Get a good accountant, make your payments on time and don’t cut corners for short-term relief.
#5 – Ignoring customer feedback
The growing world of social media can well be a portal into determining your perception among your customer base. Welcome and encourage online review postings and pay attention to what’s being said. And if something negative should arise, don’t delete or ignore it—address it directly. The virtual reality is that all comments need to be taken seriously and acted upon if necessary. Online news spreads very quickly—make sure you’re in front of all of it. Your future customers will be impressed.
#6 – Set attainable goals and follow through on them
While this should already be a part of your business plan on file, don’t leave it on the shelf. Get that plan out and read it—once a week if you have to. Absorb it. Live it. Breathe it. Find out if you’re reaching the potential you thought you would. If you aren’t, adjust often and accordingly. It’s easy to get bogged down in the daily details of your business, but making sure you’re keeping your eye on the big prize and the big picture is why you went into business in the first place. Don’t lose sight of that reality.
Related Article: 5 Biggest Mistakes to Avoid When Finding a Business to Own
We hope these helpful hints will go a long way towards having you avoid the top 6 things might kill your franchise.
This article was originally published by FranNet
Published: February 24, 2015