As a quick-service franchise business, you can quickly become a cornerstone of your local economy. While corporations have a large global impact, it’s the small businesses that truly keep the wealth moving. Your importance cannot be understated, but that doesn’t mean that running your franchise is an easy endeavor. So let’s look at the top ways a franchise can lose money.
Top Ways A Franchise Can Lose Money
There are many things that you should do – and even more that you should not do – in order to run your franchise successfully. Franchisors and subsequent franchisees can take advantage of accounting services and preferred solutions so they aren’t left by the wayside to figure everything out alone. Let’s take a look at some of the top ways a franchise can lose money so you know exactly what actions to avoid as you start your small business.
Poor Employee Training
Whether you need to hire 1 or 10 employees to run your franchise successfully, training new staff can be expensive. It’s not just the money that it costs to train an employee; you also have to share time and resources to ensure that everyone is on the same page. One pitfall that a lot of franchisees fall into at the beginning of their business is having a high turnover rate. It is important to place value in the staff you hire and equip them with everything they need to excel. When you invest in your employees, you are also investing in your company’s overall image and customer service.
Lack of Security Systems
Always remember to back everything up! No matter how much of your business is digitized, you need to implement a security system that will keep a backup of your important records in the event of a crash. Not to mention, you probably have some important company assets that you need to keep safe in the event of a security breach. Losing important information doesn’t just result in devastation for your company. Still, it could also turn into a legal issue that would cost you hundreds in fines for not having a good security system in place.
At the core of any failing business is just pure disorganization. The economy moves fast, and so do marketing trends and customer demands. It can be difficult to keep up on your own sometimes, but business owners large and small need to understand why getting organized is crucial for your company’s survival. If your financial or front-facing matters have fallen into disarray, it may be time to sit down with some experts and formulate a business operation strategy. Keeping an eye on the main parts of your company can help keep your head above water even when things get choppy.
Bad Customer Service
The worst thing you can do for your business is establish a reputation for bad customer service. As soon as the word gets out that a customer had a negative experience at your business, bad reviews will start spreading like wildfire. This is one of the biggest things that can impact your overall profits. Productive customer service efforts aren’t just there to make you look good – they will determine how likely your business is to continue in good favor with your constituents. If you aren’t currently known for great service, try implementing a rewards or customer loyalty program to entice new buyers.
Keeping up with new tech can be just as overwhelming as keeping up with business and economic trends. No matter what kind of business you are in, you need to stay up-to-date with business records on the digital end. For example, if you don’t have an updated POS system, you may not have the ability to accept newer forms of payment (such as a credit card or Apple Pay). This can cause a lot of customers to leave and form an unreliable opinion of your services. Make sure to install the latest and greatest tech so you can rack in those profits more efficiently.
Operate a Successful Franchise with Automated Accounting Services
Now that you know what to avoid, it can be easier for you to figure out how to start your franchise successfully. But you still don’t have to go it alone; it is essential that you start out on the right foot in order to build a bigger bottom line moving forward. Indevia Accounting offers automated bookkeeping solutions to help you stay on top of your company’s finances no matter what your daily schedule looks like. Get in touch with us today to learn how our financial systems have supported franchisees and franchisors across the country for over two years!