Ways to Track Franchise Success:
When running a franchise, there are plethora of day-to-day activities that demands attention. Your ability to take care of all of them will be largely determine the business success. Also, while dealing with daily operations, it’s vital for franchise owners to keep a track of the indicators truly determining the overall health and performance of their business. The blog provides you with the components of the business that wise and smart franchise owners should track while they monitor their business growth and success.
- Gross Sales:
It really helps to scale up your business, if you know how well your business is fairing as compared to the same period a year earlier. Similarly, to identify the trends, there’s lots to learn from examining month-by-month numbers. A growth in sales may indicate that your business is poised for big things but that doesn’t mean that you will not have to keep a handle on costs and customers as well. Tracking monthly sales could also help you determine the seasonality of your business. A franchisor might also rank you highly for sales and growth.
Besides increase in sales, you should also monitor expenses and keep them low for the business profitability. In a franchise, a franchisee should control costs to increase the earnings because royalties are collected based on gross revenue. A franchisor should provide standard goals of what is considered normal expenses for your type of franchise and then help to develop a plan meeting or exceeding the standards of industry. Invest where you will see returns and avoid to overspend on labor, rent and inventory.
- Know your Customers and their Satisfaction Level:
You should conduct research or survey in order to learn the total number of customers visiting your franchise every month. Average spend per customer and average frequency of visit should also be known and determined. You can and should ask the new customers where they got to learn your business, if you get to know it, you will be at the stage to determine which marketing campaign works the best and yields the productive and lucrative results. Do endeavor to ask customer’s opinion/ feedback to know how satisfied they are while you survey your customers.
- Costs and Pricing:
It needs to be known precisely how much it costs you to provide your product or services, before you know how much to charge for something. If you don’t have that information, it would lead you to significantly loose on the side of profitability. If costs are not properly accounted for, even strong sales number can cause serious issues.
Profit is certainly the most important data point. Profitability will automatically be high, if all the aforementioned factors are on track or peak. You will earn more lucratively, if you track, measure and improve your performance statistics in all other areas. In other words, profitability indicates the level of success of your franchise.
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