Tracking metrics, performance, leads and more is the most effective way of driving success, Carl Reader says
In every business, key performance indicators (KPIs) are a vital feature. Franchises are no exception to this rule. That said, just because they’re important doesn’t mean KPIs are popular in franchising. They’re often the bane of a franchisee’s life and the franchisor too. But their benefit is undeniable. Tracking metrics, performance, leads and more is the most effective way of driving success through your business.
Most franchisees are all too aware of the targets mandated by their franchisor as part of the franchise agreement and are usually related to three key areas: monthly turnover, cost of sales and gross profit.
These targets give a clear idea of how a franchise is performing at a glance. They’re high level and easy to digest.
The challenge for franchisees, however, is knowing what they can do to reach these targets and monitor getting there. This is extra powerful, because the monitoring can then be used as a driving force to reaching the goal.
For example, say you have a goal of increasing sales by £50,000. Working backwards, isolate what can directly affect this goal and monitor that, as well as those mandated by your franchisor. Let’s look at an example situation - leaflet drops - which can contribute to an increase in sales. You just have to look at the numbers:
£50,000 = 50 customers.
50 customers = 150 meetings.
150 meetings = 750 conversations (calls/email).
750 conversations = 7,500 leaflets.
This tells you that to meet a target of increasing sales by £50,000 you’ll have to drop 7,500 leaflets.
A big benefit of being part of a franchise network is that you have a wealth of experience on your doorstep. Instead of picking up the phone to your franchisor, try speaking to one of your neighbouring franchisees. A lot of the time you’ll find they too have looked to increase their turnover, gross profit, etc and will be able to offer insight or guidance.
Sometimes, though, an outside opinion is needed. This can be invaluable and fortunately there are many services available to franchisees that can provide unbiased advice and guidance.
Taking time to look at growth strategies, as well as stepping back to look at what contributes to your KPIs, is always a valuable exercise, whether done internally or by an external expert - or ideally, a bit of both.
Whichever route you choose to go down and whichever KPI you’re looking to affect, data will always be champion, not only to help achieve a desired goal, but in ensuring you are able to replicate it.
For best results, make sure your KPIs are SMART - specific, measurable, attainable, relevant, and time-bound. This makes them a valuable tool to guide your efforts and ensure they are as effective as possible.
Don’t wait for your KPIs to be driven by the franchisor alone, though. While they will likely have advice and offer support for you in delivering these objectives, ultimately as the franchisee the responsibility is yours to make sure your business is being monitored and driven forward.
Carl Reader is founder of the #BeYourOwnBoss movement and chairman of business advisory firm d&t, which has over 2,500 clients in the UK.
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