22 Feb 2018
Growing a business usually requires an investment of time, money and people. But not every company that is looking to take the next step or that is hoping to expand has all three of those things in abundance. If you are hoping to expand into a new area or market, but don’t have the capital available to cover the full cost of renting a new location or the cost of hiring a new team to staff that location, franchising your business might be the way to go.
What Does It Mean to Franchise?
When you franchise a business, you enter into a partnership with another owner. As the initial owner of the company, you become the franchisor while the person or company you partner with is the franchisee. As the franchisor, you give the franchisee licensing rights to your business’ name, logos and other intellectual property. You also provide assistance with managing the franchise location and have some say in how the franchisee runs the business.
The franchisee usually pays you, the franchisor, an upfront fee as well as a monthly or annual fee for continued access to your company’s name and support.
What Are the Benefits of Franchising a Business?
Franchising offers benefits to both the company looking to franchise and to business owners who hope to buy a franchise. One of the biggest benefits for business owners is that franchising is a lot more cost-effective than opening an additional location on their own. There is also a bit less risk involved for the franchisor. If the franchised location doesn’t work out, the franchisee is the one responsible for the location’s lease and other expenses.
A benefit of becoming a franchisee rather than starting a company from scratch is that the franchise often already has an established reputation. For example, the owner of a popular coffee shop decides to franchise. The coffee shop already has a customer base and word has gotten out that it makes one of the best cappuccinos around. The franchisee is able to capitalize on that reputation, using it to help attract customers to the new location.
One other benefit of franchising for both franchisors and franchisees is that there is often strength in numbers. A coffee shop with multiple locations is going to need more cups, coffee and other supplies than a cafe with just one location. That means that the franchisees and original owner of the coffee shop can work together to negotiate contracts with vendors, often getting a better rate.
What Are the Drawbacks of Franchising a Business?
Franchising isn’t without its disadvantages, though, and it’s not necessarily the right option for every company. For example, companies that make the best franchises are companies that are easy to duplicate. These companies usually sell a product that’s easy to reproduce over and over — such as coffee, food or durable goods. Companies that rely on the personality of their owner might not franchise as well, as it’s difficult to reproduce the spark or sizzle of an appealing owner.
Another potential drawback of franchising your business is that doing so often requires you to shift roles or to hire someone to be responsible for managing franchisees. Someone needs to be in charge of finding eligible and capable franchisees and in charge of making sure that franchisees are holding up their ends of the contract. Often, franchising a business requires writing manuals and rule books and otherwise creating criteria for franchisees to follow. Some business owners find that they have a natural knack for playing the role of franchisors while others have difficulty with it.
One last potential drawback of franchising is that it can dilute your brand. For example, if a several franchise locations open up in the same general area, the customers who were previously going to the original location might start to go to one of the others. That means that sales can drop at the first location, affecting your bottom line. Depending on the amount of demand for what your company has to offer, franchising might not be the best way to grow.
Should your franchise your business? The team at New Direction Capital can review your options for growth and help you see whether franchising or another plan is right for you. To learn more, contact us today.
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15 Feb 2018
Growth and change are usually good for your business. Whether you’re opening a new department or branch, merging with or acquiring another company, or just increasing the number of people on your staff roster, those are usually signs that things are on the up and up for your business.
But, occasionally, employees can feel lost in the shuffle as their workplace changes around them. A merger might bring with it new rules or expectations, which can leave employees feeling as if they no longer recognize the company they work for. Hiring new staff can make employees feel frustrated or might make them feel overlooked. While few businesses can escape growing pains, there are things you can do to help your employees through any shifts or periods of growth.
Give Your Team a Voice
Often, when a company merges with another, there is a clash of cultures. That can be particularly true if one company has a very casual and laid back culture while the other is more formal and buttoned-up. As a result, employees who were used to being allowed to do certain things or who were used to more laid back rules about time and schedules might experience a bit of shock when they suddenly have to wear business clothing and are expected to be in their seats, working at 9 am on the dot.
One way to help employees cope with a culture shift is to give them an outlet for expressing their opinions or for making suggestions. You can give your team a voice in a few ways. You can open up a suggestion box, allowing people to make anonymous suggestions. Another option is to have open office hours weekly or a couple of times a week. For example, you can make yourself available for meeting with your team from 1 to 3 pm Tuesdays and Thursdays. You can also encourage people to schedule one-on-one meetings with you to check in about the change or to discuss any concerns they might have.
Make an Effort to Adjust Based on Employee Comments
Depending on where you stand with your company, you might be able to enact change based on the feedback you get from your employees. For example, if a manager comes to you and says that they feel overwhelmed after the company hired 10 new people, you might be able to offer to train an established employee to take on some leadership tasks and some management responsibilities, to ease the burden on your manager.
Of course, there will be instances when you can’t do much to answer or address your team’s concerns. For example, if your company merges with another, larger business, the larger business might have more of a say when it comes to cultural changes or hiring. The best you can do in that case is promise to take your team’s concerns to the higher-ups.
Give People Time to Adjust
Few people enjoy sudden changes, especially sudden changes that have a big impact on their lives. If possible, give your team as much advanced warning as possible about new changes or how your company is growing. Issuing newsletters or calling company-wide meetings, well in advance of a merger, acquisition or other big change, can help everyone stay on the same page. If you can, it can be helpful to make yourself or others at your company available to employees as you go through a big change.
Find Ways to Keep Your Team Motivated
As a smaller company grows, it can be easier for employees to no longer feel like their opinions or concerns matter, or worse, to no longer feel like the work they do matters. To help your team through a change, it helps to find ways to keep them motivated to do their jobs to the best of their abilities. For example, you can offer a reward, either in the form of a cash bonus or a freebie such as pizza, to the team that has the greatest number of sales or to the team that achieves a particular goal.
At New Direction Capital, our goal is to help your business achieve profitable growth. To learn more about how we can help you through each step of the process, contact us today.
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08 Feb 2018
When you think of ways to help your business grow, hiring current college students might not seem like the best course of action. After all, they are likely to work for your company for a few weeks or months at the most, then return to their studies.
But hiring interns can mean more than having a person handle copying duties or coffee delivery. When used to the best of their talents and abilities, a team of interns can help you accomplish specific tasks and projects, so that you can focus on other matters. If you’re considering taking on an intern or a team of interns for the summer or a semester, weighing the pros and cons can help you make the best choice for your business.
Pro: Interns Are Inexpensive
Bringing on an intern or two is going to be much more affordable for your company than hiring another full-time employee. If you are able to pay interns, they can usually work for much lower rates than a person who is looking for a full-time job. For example, while you might need to pay a full employee $40,000 to $50,000 per year, plus benefits, you can easily pay an intern $10 to $20 per hour, without benefits. Some interns will also work for a fixed stipend, which is much lower than a full-time salary.
Some companies decide not to offer any form of financial compensation to their interns. You can go that route to save even more money, but it’s important to be aware of the legal ramifications of doing so. For example, if an internship is unpaid, it needs to provide some sort of educational benefit to an intern. If you’re not paying an intern, the work he or she does can’t be in place of the work a paid employee would do.
Pro: They Can Help Streamline Your Hiring Process
Internships can be a win-win for both intern and company. When things go well with an internship, it often translates into a full-time position with a company. That not only helps an intern find a job in what can be a tough market. It also helps your company save money and time in the hiring process. When you hire an intern as an employee, you already have an idea of his or her working style and work ethic. You also already know how well he or she gets along with the rest of your team.
Pro: Interns Can Bring a New Perspective to Your Company
Another benefit of bringing on interns is that they can offer a different way of thinking about challenges your company might be facing or might offer insight into the needs or desires of a younger generation, which can help your company expand its customer base or stay current in a competitive field.
Pro: Interns Free Up Your Time
Hiring interns can help to give you and other members of your management team more time to focus on big-picture issues facing your company. Your interns can tackle the tasks and projects that are important, but that maybe don’t require much skill. That’s not to say that you should relegate your interns to doing coffee runs or any other stereotypical internship tasks. You want to give them meaningful work so that your company can advance and so that your interns can actually learn something.
Con: Interns Vary in Maturity Level
One of the drawbacks of working with interns is that some are less mature than others. In some cases, it’s just a matter of ignorance, for example, an intern might not be aware of what an appropriate work outfit looks like or might not realize the importance of showing up on time in the morning. Those issues can be easy to correct and can actually help an intern learn what life is like in the work world.
But there are also some interns who seem to think that an internship is a time to goof around or an excuse not to go to class for a semester.
Con: It Takes Time to Develop an Effective Intern Program
Another potential disadvantage of working with interns is that it does take some time to develop a program that benefits everyone involved. Starting a program can cost you when it comes to effort and time spent on putting together the logistics of the program, not to mention the time spent recruiting interns. But if all goes well, you should only really have to worry about startup time initially. Once your program gets up and running, things should go smoothly and efficiently.
Hiring interns is just one way your company can pursue growth. The team at New Direction Capital can help your business scale and achieve growth. To learn more about how our virtual CFO services can help your company, contact us today.
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“What are your strengths and weaknesses?” “Where do you see yourself in five years?” Many candidates go into an interview expecting to be asked the same basic set of questions. But do those questions really help you get to know who you are considering hiring? For those most part, you’re likely to get a well planned out, canned response to generic interview questions. To really learn more about how a candidate thinks and how he or she will approach a job, it pays to ask a different set of questions. Here are a few interview questions that go beyond the superficial.
1. Would you rather be perfect and late or “good enough” and on-time?
This question can give you a good idea of where a candidate’s values are and whether you’d be able to rely on him or her to get work done in a timely fashion. It also gives you insight into how a candidate might approach a project or task. What you’re looking for here is a well thought out response that carefully explains the advantages of one option over the other.
2. Pitch (your company) to me.
Asking a candidate to pitch your company to you gives you an idea of how well they understand your business or product, which gives you an idea of how much research they’ve done into your company before applying for the job. If you’re interviewing for a sales related position, how the candidate responds also gives you an idea of how well he or she is able to make a pitch and convince someone to make a purchase.
3. Look back on a time when you failed. What did you learn from that experience?
Although most people probably don’t enjoy reflecting on a time when they weren’t entirely successful, asking applicants to explain a time when they did fail and what they learn can give you a sense of how they handle problems. For example, if a candidate is hesitant to name a time when things didn’t go well or says something along the lines of “failure isn’t an option,” you can get the sense that they might struggle with the challenges of the job or that they might be inflexible. Additionally, if a candidate is quick to blame others for a project that went astray, you are able to see that he or she might be challenging to work with or less than a team player.
On the other hand, candidates who are able to describe a time when they failed, then give you details on what they learned and how they’d do things differently in the future might be the ones you want to hire.
4. Can you describe the characteristics that make up your best relationships at work? What about your worst relationships?
Asking applicants to describe their work relationships, both positive and negative, can give you an idea of whether or not they’d be team players or people you’d want to work with. Asking them to explain the features of the best relationships can give you a sense of whether you look for the same things when it comes to working relationships and teamwork. Asking them to describe the worst relationships and what made those so bad can give you an idea of how a potential employee handles a delicate situation.
5. What do you do outside of work?
Asking people what they do “for fun” or for personal growth outside of the office can give you a look into their inner life. It also gives you an idea of whether they are interested in personal growth and development or not. While you probably wouldn’t not hire someone because you don’t like their hobbies, the type of hobbies a person has can speak volumes.
Making the right hire the first time can save your company a considerable amount of money and time. Asking the right interview questions can help you filter out candidates who aren’t a match and can make you more likely to hire the right person.
The team at New Direction Capital can work with you to find more ways for your business to save time and money. To learn more, contact us today.
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21 Dec 2017
Several things that were once essential for running a business have gone the way of the dinosaur. Almost nobody uses a typewriter anymore and it’s relatively rare for a company to send or receive faxes these days. Next up on the chopping block might just the traditional office. As technology has made it easier than ever for employees to communicate and connect, even when they are miles apart, the remote office seems to be the workspace of the future.
But remote work isn’t always the best option for every company. If your company is considering offering remote work as a perk or options, take a look at the pros and cons of it before making the switch.
Pros of Remote Work
Perhaps the biggest benefit of offering remote work is that doing so makes your company more attractive to employees. About two-thirds of employees would like the option of working from home, as it would eliminate the need to commute and allow them more time for their family or other non-work obligations. Giving your team the option to work remotely also helps lower your rate of turnover, as employees who are satisfied with their work conditions are going to be more likely to stick with a company.
Reducing turnover leads to another indirect benefit of making the switch to remote work. Doing so can save your company money. If fewer employees leave, you’ll spend less trying to replace them. You’ll also be able to grow your company without having to lease larger office space or without having to lease an additional office.
Another “pro” offering your team the option to work remotely is that you can expand your hiring pool. Instead of only hiring people who live nearby, you can look for new employees across the country. If you end up hiring someone who lives far away, you don’t need to offer to cover the cost of moving him or her, as the employee can remain in his or her current location.
Cons of Remote Work
One of the drawbacks of remote work is that it does blur the line between “home” and “work” for some people. In some cases, that can mean that you have employees who feel that they need to be available and need to response to emails, texts or calls at all times of day or night. In 2014, the New York Times reported that people worked remotely worked 9.5 percent longer than those who worked in an office.
Of course, it’s also possible for productivity to slip when people start working remotely. Some employees need the structured environment found in a traditional office space to help them concentrate on their tasks and get their work done.
Another major drawback of remote work is that it can create division among employees, especially if some employees work in a traditional office and some work from home. Those who work at home might feel out of the loop while those who come into work might feel that they are the ones carrying the weight and doing all the heavy lifting. To keep that division from becoming an issue, it might be a good idea to take an all or nothing approach to work remote. Have each employee stay at home and work — managers included — at least once per week.
How to Tell if Remote Work Is Right for Your Employees
If your employees are asking to be allowed to work from home, that can be a sign that allowing remote work is going to be a good option for your company. You can try it on a trial basis, giving your team the option to work from home for a month, to see if there is an improvement in satisfaction and productivity or not. Offering the option to work remotely might also be a good idea if your company is growing by hiring new people but doesn’t want to rent additional office space.
New Direction Capital can help your company find ways to save money as it grows. To learn more about working with a part-time CFO and how it can help your business, contact us today.
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