Many feel that if managed properly, owning a diverse set of businesses can help insulate against business peaks and troughs in the market. Many wealth planners will generally present diversification models to allow the purchase of multiple asset classes such as stocks, bonds, and mutual funds. Diversification in the franchise industry is different. Franchisees can diversify within a particular industry by acquiring different brands. Diversifying within the same industry, such as the buying several different restaurant brands, still allows the franchisee to apply the same basic infrastructure to their business.
This strategy of franchising helps spread the risk from a franchisee’s perspective. If the demography of existing brands and new brands are vastly different, there becomes an opportunity to cross-market both products and knowledge. Aziz Hashim, the president and CEO of NRD Holdings, LLC, highlights a smart way to diversify in his recent piece in Franchising World about this topic, stating that “The most effective way to execute a diversification strategy is to identify opportunities in new sectors where the operational complexity is generally lower than the existing operations so as to not dilute the franchisee’s time and focus, where at least some existing infrastructure can be leveraged and ideally where there are natural synergies through complementary service offerings and similar demographic.” Complementary service offerings can play a key role in expanding your opportunities and create growth.
Do you own a diverse set of businesses? We would love to hear feedback from you!
LEADERSHIP IS PRICELESS.
Any growing business needs a strong leader. This holds true especially when a business is struggling. Senior management should play on the strengths of other team members to reinvent old ways and pull from outside sources to evaluate what is and what is not working. As a leader, it’s important to be transparent and honest about the financial stability of the system, yet remain optimistic that positive changes can be made to face economic conditions head on.
2. ACT LOCALLY
National and global goals are certainly something to aspire to; however, market share is won at the local level. A successful and motivated franchisor helps franchisees get active with local businesses, schools, and charitable organizations. Having a strong brand in a local market can build reputation and lead to potential growth opportunities.
3. LOYALTY IS EVERYTHING
Customer loyalty is crucial during tough financial times. Along with a high-quality product, it is just as necessary to give your customers an awesome experience, consistently. To provide loyalty incentives to your customers is a win, win. For example, this year, the Marco’s Pizza franchise received more than 27 percent of new restaurant applications from Marco’s Pizza customers. Additionally, 30 percent of applications came from referrals of existing owners who sought to share franchise opportunities with ambitious entrepreneurs.
Thanks to Franchising World Magazine‘s January issue for some of this week’s content! Check out more here!
I read a great article last week on Forbes, here. It got me thinking… we often set personal goals for the new year (which is great – January is a good time to reflect on the year’s past and prepare and set goals for the year to come,) but not so often, perhaps, do we set goals for our businesses.
The author in the Forbes article, Drew, mentions great overarching goals like following a content marketing plan, utilizing apps that can make life easier, and showing customer appreciation. The ways you go about fulfilling your goals is obviously entirely up to you. I have found in my personal experience with New Year’s resolutions that it is easier to break goals down into more detailed “mini-goals”, so to speak.
For example, if your business goal is “to have a greater social media presence in 2014”, it may be easier to make your resolution something a bit more tangible – “We will post 200 Facebook statuses this year” or tweets, or Instagram pictures, or blog posts or… you get the point. Having a more specific goal, in this case a specific number you will reach, will probably help you better keep track of that progress and feel success at the end of this year when you reach your goal.
What are your business goals in 2014? Share them in the comments below!