2014 - A Franchising Business Bubble set to burst?

Helen Gould is MD of PA4You Telephone Answering and Sales Support Services who are also a recognised BFA Supplier member.

According to economic pundits, 2014 is set to be the most promising year for business growth in decades.

Long-term, record-low bank interest rates means increased borrowing and spending, and low inflation rates means wages and the economy are kept at a steady level. Government Funding for Lending and other incentive schemes are pushing the banks towards lending to SME’s and start-ups again.

And so as we begin to speed up the climb out of recession, now could be the right time to start a new business.

So what could this sudden growth mean for the franchise industry?
Whilst 2014 may be the right time to start a new franchise business, many existing franchise businesses are still feeling the effects of the recession.

Those businesses that had to shed staff during the recession may now not have spare staff to help cope with the surge in increased sales activity that 2014 promises; new enquiries and a growing customer base means more phone calls, more emails, more booking admin etc.

Equally, these businesses can’t afford to miss the new opportunities that this will bring either.

So, are we in danger of ‘overtrading’, creating a ‘business bubble’ for those franchisees without a good support network in place? Are we selling more than we can cope with and putting additional serious operational and financial pressures on the business it really could do without?

Once growth begins to impact on your franchise business you may consider employing more staff. You will however still have growth operational issues to deal with, and maybe a lack of reserves from previous year’s profits to pay for extra staff and stock.

So what do you do?
These functions can be cost effectively outsourced to trusted suppliers who make this their main focus, freeing you up to do what you and your team do best.

By finding trusted suppliers now and bringing some smart operational efficiencies into your franchise business, you will be best placed to support its growth - and help focus your own efforts on fulfilling those new enquiries. This will bring better, faster, profits into the network, making it stronger, flexible and better able to cope with the many growing demands as it gets bigger.

Franchisees and their HO staff are experts at closing sales and fulfilling orders. Don’t let them get too bogged down in other, non-profit generating, aspects of the business. Keep them focused at the profit generating end of the process. With the right expertise, growth strategy and support in place your franchise can only get better.

Good luck with whatever 2014 brings you and let’s plan now for it being the best year ever!

For more information on PA4You, please click here