Plan Your Finances Right This New Year

Here comes the New Year and franchisors irrespective of the industry, plan new strategies for attaining growth and success of their franchise ventures. However successful a business is, but there is always a room for improvement. During the year there are lot of instances when franchisors want to introduce some major changes in their businesses. However, they do not adopt any change in the mid of the year for fear of failure, and New Year is the best time to revive old strategies and experiment new ideas whether related to finance, execution, expansion, marketing or promotion. Out of all it is always the financial issues that make up the most essential part of any business, whether franchised or self-owned. The article here discusses the financial strategy or resolutions that franchisors plan this New Year.

Financial Strategy this Year

One of the best ways of increasing franchise profitability is by innovating and making new plans for the betterment of the business. Financial strategy of any franchise business basically revolves around the new ventures the franchisor is planning, expansion plans whether nationally or internationally, support system, marketing or advertising campaigns and so on. In words of Maneesh Anand, Director, Slip Guard (Mithila Industries), “Financial year is different but the calendar year also requires certain resolutions to be made from franchisors. It is important to make resolutions in the New Year.” Similarly Pankaj Agrawal, Director, Academy of Applied Languages , Venture of GenNxt India said, “Whether we take the New Year as the calendar new year or the financial New Year, we constantly need to make and review our financial plans/ resolutions.” Below given are few of the promises that have to be made by the franchisor for achieving higher goals and profits.

Expansion strategy: Franchisors need to strategise an expansion plan in the beginning of the year. It is of utmost importance to think and then execute expansion plan before going for it. As said by Anand, “Our company is related to new kind of product. During the last year we were not sure of its success. But gauging its popularity we have made plans to expand rapidly from January.  We will be investing up to Rs One crore on expansions of the brand and also on developing and training our franchisees.” Moreover at the time of New Year, franchisors should rethink about their postponed expansion plans. As said by Agrawal, “We all as humans sometimes procrastinate and forget certain plans. Personally, I follow a simple system of going through every page of last year's diary and picking elements that were ignored/ not completed and bring them into my new Year Planner.”

Marketing and promotional strategy: Each year the franchisors have to come up with innovative marketing and promotional strategies.  These should be carefully made in the beginning of the year so that the various strategies can be employed for the benefit of the business.

Launching new ventures: It is at the time of New Year that franchisors should plan to launch new ventures to add to the existing business. Moreover, they should keep their franchisees and their employees well informed of their plans so that they can also contribute their ideas etc.

Setting personal monetary goals apart: Different entrepreneurs have different aspirations from their venture. An entrepreneur who has started his business only after retirement aims for rapid success but his idea of a successful franchise may vary from an entrepreneur who is just in his 30’s. The New Year is considered an appropriate time for setting your personal as well as professional priorities. Entrepreneurs should always keep in mind the personal monetary requirements and set aside an amount for it. Taking help from franchise experts is a good idea for franchisors and franchisees with too many personal responsibilities.

Planning the budget: Planning your budget is critical for the company's future. Entrepreneurs need to make a budget that they would be investing in their business in the New Year. Starting of the year is the best time to make the financial arrangements for the whole year. Regarding this Sameer Kachru, CEO, Go! Chaatzz shares, “In the new year franchisors and even franchisees need to take out top three cost heads and also come out ways to reduce the cost. A good budget requires cost-cutting as well.”

Fixing deals with vendors: The costs of products and services keep on increasing always. Keeping in mind the improving economy and inflation, the franchisors and franchisees should try to make long term agreements with their vendors at a fixed cost. During inflation, the vendors are the first ones to increase the price of their products as well as raw materials. Therefore it is always a good idea for franchisors and franchisees to make a long-term agreement during the staring of the year. In words of Kachru, “Along with fixing costs with vendors, rental deals should also be given priority. Outlet rentals occupy a major portion of finances and one should always set rental cost in the beginning of the year.”

Recruitment strategy: For making employees loyal to the company, it is essential to make them a part of the franchise by sharing aspirations and goals with them. Moreover the New Year is the time for changes in the pattern of working etc, therefore keeping your employees informed is always advisable. The franchisor or franchisee should be clear and allot certain roles and responsibilities to every employee. All this should be done in the beginning of the New Year.

Word of Caution

To conclude, it can be said that for a successful and a year full of growth, franchisors should strategise their financial issues at the very beginning of the year. These financial resolutions with help the franchisors achieve long term goal. However, it is also true that all resolutions are a waste until they are executed properly and diligently. Agrawal said, “The most important thing about any goal is to make it work. Some dream of taking Rs 15 crore company to 200 crore in two years. It is not realistic. Making goals and resolutions which can be achieved is essential.” So all you franchisors, carefully execute your plan of action for the New Year to achieve financial gains.