By Chris Stuckey, Managing Director at Pirtek UK & Ireland
Keeping any business operational and profitable is always a challenging task but when you are faced with periods of global economic turmoil, that task becomes even more daunting. The aftershocks of the pandemic, alongside more recent disruptions such as the war in Ukraine, Brexit, and even the emergence of generative AI are having enormous impact on businesses far and wide. With soaring inflation and subsequent tightening of budgets, the current business landscape is a certainly a challenge.
Turbulent the market may be, but the franchise model offers several advantages that can help unlock the door for growth opportunities. Evidence from the annual British Franchise Association/NatWest franchise surveys suggests high success rates for UK franchise businesses; with 80% of new franchises succeeding in their first five years of business and the overall franchise industry contributing £15 billion to the UK economy. This shows that despite periods of economic stress, the sector is still showing strength and resilience.
It is crucial that current and prospective franchise businesses follow some key principles to ensure they can navigate an unstable economic climate unscathed. In addition, this will help them future-proof their business and make the most of being a franchisee. These principles and guidelines helped guide us at Pirtek, the UK and Europe’s number one provider in fluid transfer solutions and on-site repairs. As a franchise brand with 35 years of experience, following this advice will help set the foundations for success now, and in the future.
1. Adopt and implement an agile roadmap to chart your growth
It should go without saying, but it is essential that franchisees create and abide by a roadmap to chart the direction they want their business to go in. This creates a unified framework for the whole business and all its composite functions to follow as it strives for growth whilst successfully meeting the needs and demands of customers. Customer disruption could have catastrophic damage to a business’ ability to grow, as recent years have proven. Although crises can occur without ample time to prepare, it is essential that a business’ roadmap is agile leaving them able to respond to a host of difficult situations. Although no-one could have prepared fully for the impact of a pandemic and the long-lasting economic consequences, we can certainly say that those who had spent a significant amount of time and resources preparing for the impact of Brexit, ensured the continuity of supply necessary to maintain the support of their customers.
2. Build and expand a diverse portfolio of customers
A common pitfall that many franchise businesses face is that they can all too easily be focused on one specific sector. Mitigating risks through the diversification of client portfolios is a proven strategy by many successful businesses.
At Pirtek for instance our services span many sectors. We cover and support a wide range of industries including construction, manufacturing and utilities. It’s therefore imperative that franchisees look to see how they can implement this strategy as diversifying their customer base not only avoids limiting their business to one market, but also helps avoid the repercussions should that sector experience isolated economic difficulties. In addition to their diversification strategies, if franchisees focus on sectors that are considered ‘essential’, this will help contribute to avoiding any damaging risks. Industries such as construction or manufacturing will always continue to operate in times of crisis. What this ensures is that even in the most challenging of times their business will be able to sustain its profitability.
3. Take advantage of your support network to maximise opportunities for expansion
Making full use of a franchisor’s support network is crucial for maximising opportunities for growth. Franchisees can create powerful bonds with their franchisor and a supportive franchisor can provide access to many things that can help accelerate their growth and profitability. This can include strategic development or a solid prospect pipeline, which guarantees a larger customer base for the franchisee earlier in their business lifecycle. Following an established business framework from a franchisor as well as taking advantage of their established brand, will enhance the likelihood of being successful.
4. Streamline your operations to maximise efficiency
As we saw at the height of the pandemic, those businesses that relied heavily on complex operations were hit hard and as a result, their productivity and output plummeted. Franchisees must look to streamline their operations as this will have a positive influence on their efficiency and productivity, as well as bringing their overheads down and increasing their profits. To achieve this, franchisees could look at adopting new technology solutions or they could automate processes in the business. Not only will this result in improved efficiency and resilience, but also help eliminate operational bottlenecks that weigh the business down particularly in challenging times.
5. Remember to humanise your brand!
Although the focus of many franchisees will primarily be on growing their business, never forget the importance of people in that journey. No matter what sector their business operates in, a franchisee’s ultimate target must always be to engage with their customers and build the kind of loyalty capable of withstanding the harshest climates. Human-to-Human relationships are crucial here so franchise owners must consider the extent to which people are part of their brand, also ensuring they are good brand ambassadors. Remember, that in times of disruption, empathy and understanding can go a long way towards building and maintaining brand loyalty and customer satisfaction.