If you are a business owner, performance data is valuable, but collecting that data isn’t an easy or enjoyable task. It requires consistency and time, which means it can sometimes take away precious time from running your business.
However, data will tell you which areas of your business are performing well and where there is scope for growth. Developing a successful and sleek business requires paying close attention to your performance details. It’s why you need to work on your franchise with the same level of dedication as you do for the franchise.
When you shift your focus, it will keep you on track with best practices to boost your profitability. It might make you feel that the task is eating into the time you need to work on other aspects of your franchise. However, the time and effort you put in will help you design a better and smarter business. There are several ways to track franchise success, but here we look at some basic ones that you can use to start out with:
This is one number you would surely be aware of. Sales revenue doesn’t reflect success, but it can indicate your location’s trends as a sales increase. This is particularly true if the growth rate is in line with what a franchisor expects their new franchisees to maintain. Sometimes, the franchisor might also give you a higher ranking for sales and growth; however, you would need more data to determine whether that translates to success.
While increasing sales is priority, you also need to keep track of your expenses and keep a handle on them. This is the key to profitability and every dollar that you spend will affect your overall profits. In franchise businesses, the gross revenue determines the royalties to be collected, making it crucial to control costs and maximise the dollars that remain in your coffers.
A credible franchisor will always provide franchisees benchmark goals to give them a better understanding of which expenses are normal for a franchise in their company. They would also help you develop a plan that’s in line with industry standards. Determine which areas you will see returns in such as employee retention and marketing and avoid excessive expenditure on inventory, labour or rent.
Even if you feel that your business is doing okay, you also need to know all the service cost details. Without this information, you would not be able to price services or be aware of what the costs to provide those services to the customer are. This should never be a guessing game and you need to collect data on pricing and goods costs. Once you understand all of your costs, you will automatically begin making more money.
Well-trained and happy employees will be an asset to your business, making it important to measure employee satisfaction. Once you collate data on employee satisfaction, it will correlate with your sales numbers. Train, respect, engage and reward all your employees and you will notice that the data shows an increase in revenue. It also means you will spend less money on recruiting.
Data will always change by industry, but as a franchise owner, you need to know your customer data. This includes cost to acquire customers, average spend and customer totals. These figures will help you understand whether the amount you spend to keep them around is worth the cost. Returning customers are the lifeblood of your business and word of mouth can be incredibly valuable to strengthen your brand.
In addition to these things, you also need to keep track of customer reviews and business profit data. When you make a consistent effort to track your business’ data you can use it effectively to make all the hard work you put in, pay off.
For more information, feel free to call the franchising experts at The Franchise Institute. You can call us on 1300 855 435 or fill in this contact us form, and one of our experts will contact you as soon as we can.
Thanks for reading,
The Franchise Institute Team
1300 855 435