A new franchise opens every eight minutes of every business day, according to the International Franchise Association (IFA). But how much do they really generate in sales? IFA reported franchises bring in more than $800 billion in annual sales. They also noticed a trend that the economic downturn is actually driving franchising with an influx in multi-franchise owners.
It’s easy to get lost in the upsides of what franchising can do for your business. But it’s just as easy to get lost in a sea of paperwork, tax forms and figuring out best practices to stay on top. Here’s a list of what to look for to keep your franchise growing.
Build a strong company base
Before you can expand or launch additional franchises, you need to lay a strong foundation with your current company. Refine practices on hiring staff, training management and getting feedback from current customers to take to your next business venture. Find an accountant experienced in franchise taxes and business practices. You can also set up an inexpensive bookkeeping system to streamline your finances and schedules. Quickbooks can address invoices, track sales and expenses, pay your employees and be integrated to work with your accountant.
Create a manual
Whether you’re franchise is running smoothly or you’re struggling to keep afloat, creating a company manual will keep you focused and your staff on task. Don’t assume your team knows how you think or what makes the most sense for your business. Put it in writing and document how everything from inventory to social media marketing to customer service should be handled. If you ever decide to expand and buy other franchises, you’ll be ahead of the game with a go-to resource to recreate your strategy.
Organize your deductions
It’s easy to think you’ll just remember the deductions or ask your manager come tax time. But deductions can mean the difference between thousands of extra dollars in your pocket. Scan receipts or use a service such as Shoeboxed to help stay organized and maintain a paperwork trail for every purchase. Don’t forget to report deductions such as business use of your personal car, your home office, retirement plans for your employees and your company’s rental expenses.
Document your royalty and advertising fees
Most franchises require annual royalty and advertising fees regardless of how your business is performing. But it’s easy for new, and even experienced, franchisers to overlook the expense. Make a projection of your profits and deduct the royalty and other related fees early. You might need to adjust your monthly or quarterly budget to compensate for upcoming fees.
Find a mentor
Perhaps the most important part of keeping your franchise on track is building a mentoring relationship with another franchiser or like-minded business owner. They already have the experience behind them to know what works and how to most effectively organize their business from scheduling all the way down to collecting payments from difficult clients. They also have the hindsight to know what you can quit worrying about and which areas need more work, like finding a good manager.
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