When you buy a franchise, you’ll learn how to operate the business on a daily basis and that will set you up for managing the day to day detail. However there is more to staying on top of a business than maintaining operations.
Staying on top of your business means taking responsibility for its performance. It’s about making sure there is enough money to pay the bills, it’s about meeting legal requirements and directing the business so you have a good chance to achieve your goals.
Most new franchisees don’t have experience of how to run a business. They learn as they go. But by starting off with an understanding of what’s involved, you can get off to a faster and more confident start.
BENEFITS OF GOOD MANAGEMENT SYSTEMS
You’ve probably met people who don’t seem to be on top of things.
Perhaps you have in mind a cafe that’s short staffed or a tradesman who is dis-organised with appointments or late with invoicing. Some business owners aren’t financially prepared for the end of their lease, or are unprepared if a key staff member leaves. Others often seem anxious about bills.
Sometimes weak business systems contribute to financial stress. That’s one important reason to pay attention to the management side of things. It’s not just about avoiding problems though!
Good management habits will help your business be more enjoyable. They will help you feel confident the bills will be paid, help you make good decisions, and you’ll be able to deal with problems more easily and quickly.
All this means less worry about the back office, and more time and energy to keep customers happy and coming back.
Also, as your business skills develop, these will help you expand, add a second location and take on new challenges in business or within your community.
RUNNING A BUSINESS: WHAT’S INVOLVED?
One of the biggest mistakes people make is to assume they know what’s involved in running a business. But starting an enterprise means learning how to run one.
Before they start a franchise, most people haven’t been involved in the all the detail of managing an organisation.
And there’s a lot involved!
Running a business includes getting the accounts done, paying staff and suppliers, and complying with government regulations, dealing with the bank, fixing the computers.
Because there’s so much to take care of, business management can seem daunting and is sometimes neglected.
But with an understanding of what good management looks like, and how to do it, you can set up systems that will help you stay on top of your business.
THREE FOUNDATIONS FOR GOOD BUSINESS MANAGEMENT
One way to approach this is to think about running the business in three parts.
- First is day-to-day administration. These are the systems and procedures for things like financial record keeping, paying staff, rostering, and having necessary supplies on hand.
- Related to the administration side are compliance obligations. These relate to government, legal and franchise requirements and include taxation, company administration, abiding by wage regulations and workplace safety.
- The third part is the overall business management. This is about setting goals, monitoring results and making decisions that help you progress towards your goals.
5 ACTION STEPS FOR NEW BUSINESS OWNERS
So, if you’re starting a business, what can you do to help stay on top of things? Here are five habits of successful business owners we’ve known. By implementing these practices from the start of your business and you’ll find it much easier to manage your own business well.
1. Set financial targets
Financial targets help provide a focus for your efforts. Your plan should include targets for sales, costs and enough profit to repay loans, the money you’ve invested, and to you a wage for your work, as well as a dividend as the business owner.
2. Establish financial systems
A routine for your record keeping, receiving and making payments and handling paperwork and managing cash flow will help you get a sense of control. Many people find it best to engage a qualified, certified bookkeeper. This avoids you having to do the work at nights and weekends.
3. Have monthly business meetings
This iswhere you’ll check on progress towards your goals, review your financial results, consider business problems and make plans to address them. Without such a meeting people often fall behind on their goals and it becomes difficult to catch up.
4. Consult appropriate advisers
You can’t possibly have expertise in every area relating to business. Also, it’s very difficult to effectively analyse your own business. That’s why you must engage appropriate advisers including a franchise accountant and independent business adviser or coach. Your advisers should also have relevant business experience and skills to alert you to problems.
5. Seek continual improvement
Continuous improvement means learning from past experience: what worked and what can you do better. This is important because you simply can’t become a business expert overnight. It includes investing in your personal development to increase your business skills.
Whether you’re new to business, or already established, these practices will help you run a better business.
Kate Groom helps franchises meet the challenges of doing business today’s economy. Kate is co-founder of Smart Franchise – a business which provides financial and business acumen training and coaching and conference sessions for franchises (www.smartfranchise.com.au).
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