Whether you are buying a franchise or starting a business selling real estate, a practical business plan can really help. Even if you don’t technically need a plan to show to a bank or an investor, you can use the plan yourself. Give yourself a head start by answering three key questions, then flesh out the steps to follow.
1. Where do you want your business to go?
Where do you want it to be in three years?
Visualise your typical day in the future. Will you be working part-time out of your home, part-time from a brokerage office or full-time from your own brokerage office?
As part of this same answer, define success for yourself. Most people assume business plans are about money and money alone, but the reason many people start their own business is about a desire for both money and time. Do you want to be able to mind a business and coach a youth sports team at the same time? That flexibility might define success for you. Or maybe you want to work as hard as you can to be listed in the top-sellers list of the local real estate community organisation. You’ll want to build a plan to match your real needs, not just some standard real estate assumption. Everybody is different, so every plan should be different.
2. How are you going to use this business plan?
Will you be showing it to a bank as part of a loan application, or will it be for your eyes only? The plan should fit its purpose – form follows function. In my experience, most real estate brokers are planning for themselves and people in their inner circle who are also involved in the business, not really for outsiders.
If you’re like the majority and won’t be showing your plan to strangers, you won’t have to edit and polish the text and fine-tune the plan’s format because it’s just a working document. Bulleted text and key references to main concepts might be enough to keep you on track.
3. How will you develop a specialty or focus?
Think about how you can be different from all those other people out there trying to sell real estate. Is there a portion of the real estate market that interests you more than all the others? You might have experience or interest in economic starter houses or palatial high-end mansions, or maybe you want to work in commercial real estate. Maybe you know one neighbourhood very well. Or maybe you’re a whiz at analysing the market – I personally know one real estate broker who built his business on technology, using a website full of interesting market statistics to attract new clients.
Most people who start as brokers begin by affiliating themselves with an established brokerage business. Most of those brokerages offer a lot of help to new affiliates. As you look for your specialty or focus, absorb the valuable information and step-by-step help you get from the branded brokerage – it’ll help you get to the next stage.
After answering these three questions, use your answer to question #2 to determine how much work you put into polishing your answers for questions #1 and #3. With that in mind, you’re on your way to a new business and a completed business plan. To further flesh out your plan, get your financial projections in order:
- For your sales forecast, try to create an educated guess of your unit sales and average commission per sale to get an estimate of the actual commissions you’ll earn. Remember to estimate the impact of sharing commissions with other players in the deal.
- For starting costs, estimate what you need in terms of office equipment, stationery and other standard start-up expenses. Depending on your brokerage affiliation, you may or may not need professional help from attorneys, graphic artists and so on. Create as comprehensive a list as possible.
- For running costs, estimate monthly expenses for office space, telephones, computer connections, cell phones, etc.
- Pull your commissions, costs and expenses into a cash flow estimate. Remember to include the impact of the time spent waiting to receive commissions (such as escrow periods) compared to when you need to pay costs and expenses. Cash flow is much more important than profits.
Pull the sales forecast together with your text explaining the key points of your business, then add details you can track later. These details include dates, deadlines and activities. Then, as your business starts, make sure you go back to your plan every month to review, revise and manage.
3 Tech Trends Your Franchise Should To Keep Up With During The 2018 Restaurant Revolution
For the first time in history, the majority of consumers are – arguably – more interested in how they buy instead of what they buy, according to research. Catch up quickly by responding to this in three ways.
How many ways can you customers choose an item, order it and pay for it in your restaurant? Mike’s Kitchen, Spur, The Baron, and other sit-down restaurant franchises across South Africa have widely started accepting mobile payments using the Zapper app. If you have too, you’re on the right track, because convenience reigns in the restaurant industry, especially where trends are concerned, for your current and future customers.
“In the last two years, there’s been a 50% increase in restaurants using technology. Almost 80% of guests say restaurant tech improves their guest experience, especially when it makes service faster,” according to a recent study focusing on diners and technology.
Here are three of the top trends influenced by consumers’ mounting affinity for experience over your menu items, décor or prices:
1. Self-service via touchscreen kiosks
Who wouldn’t appreciate skipping the queue and enjoying a consistent enhanced ordering experience? Add rich imagery and food customisation capabilities and you can see why self-service is poised to make a huge impact on the QSR industry in 2018.
While kiosk aren’t a new form of technology, combined with loyalty programmes, touchscreens for mobile order pick-up and – in the near future – facial recognition to identify and service customers accordingly, they’re about to become a mainstream addition.
What’s in it for you though? Well, besides happy repeat customers, your order accuracy will improve and staff will be free to attend to more strategic activities within the business.
2. App-enabled ordering and pick-up
Research by QSR Web found that digital restaurant ordering is growing 300% faster than dine-in traffic.
Because “restaurant consumers are aggressively gravitating toward concepts that offer the greatest level of convenience and control across ordering, payment and distribution,” according to analysts from Wells Fargo, mobile ordering technology requires your franchise to go a level higher than its current system.
Consider implementing features such as dedicated drive-thru lanes to for app orders. Or what about outdoor locker systems activated by a mobile phone, enabling a customers to receive their order without interacting with restaurant staff?
3. Analytics aiding personalisation
Even better than mobile ordering though, is using AI to leverage apps including Facebook Messenger or simple SMS to take customers’ orders, for a personal touch. Not only does the chatbot record orders, but based on individual customer data, it’s able to predict what they may choose to eat based on various factors including age, gender and even mood.
If you’re wondering how the mood is detected, fried chicken giant and search engine firm Baidu have established the answer: Facial recognition technology piloted in Beijing that predicts customer orders based on their face displayed in the kiosk screen.
“Restaurant technologies that capture data, such as customer orders and preference will businesses better understand their target audience. Hence, they will be used extensively in 2018,” according to Indiez, the company that developed Domino’s pizza’s app.
How To Start A Funeral Business
Running a funeral business can be lucrative, but you must determine whether it’s the right venture for you.
In South Africa, burial remains the most popular end-of-life choice.
“Just how many burials take place is difficult to measure because there is a formal and an informal funeral industry in South Africa,” says Rey von Ronge, secretary of the National Funeral Directors’ Association, an industry watchdog organisation specialising in resolving disputes between undertakers and the public.
This following guide explains how you can open your own funeral home in South Africa and covers these topics:
The Pros & Cons Of Owning A Restaurant Franchise
Do you have what it takes to be a successful restaurateur? Our franchise expert offers some words of wisdom.
There are many different types of business format franchises, but when most people think of a franchise business, their first thought is of food. The success and growth of the many big brand-name fast-food franchises makes this a logical first stop in the thinking process.
When evaluating restaurant franchises, you must focus on the characteristics of the business from a franchisee’s perspective to determine whether this industry is the right one for you.
There are some wonderful advantages to having a food business, but there are also some challenges you need to be aware of before proceeding in this industry.
In assessing a food business, the main advantages are typically considered to be:
Consumers have been trained to look for franchise food outlets, which can represent a big advantage for a start-up. You need to make sure the product offering of the food franchise has “staying power” in the marketplace rather than being a fad or fringe product.
Ease in Financing
Traditional lending sources are very familiar with the real estate and equipment needs of a prepared food operation, which may ease the challenge of obtaining start-up financing. These sources also like the relatively high revenue production of a typical food franchise.
Track Record of Success
Many food franchises have multiple units and have been operating for a while, making it fairly simple to determine and verify their track record of success. That can help you make an informed decision about the business prior to getting involved.
Whether valid or not, many people associate a high degree of glamour with a person who owns a food franchise business. The fairly high degree of status associated with this occupation is important to many prospective franchisees.
In assessing a food business, the main disadvantages typically include:
High Initial Investment
Most food franchises require a significant investment to get started. Food preparation stations, sinks, stoves and ovens, grease disposal systems, venting requirements, customer seating and bathroom areas – the list goes on.
Zoning and Code Compliance
The government tries to ensure that any food business meets numerous codes and guidelines so the food product is safe for the public to consume. Complying with these regulations can initially can be time consuming.
Virtually any food franchisor will provide extensive assistance to a new franchisee in terms of dealing with zoning, permits, code compliance and all other site-related issues, because the new franchisee probably doesn’t have a clue how to do this whereas the franchisor has lots of experience on these matters.
If a food franchisor doesn’t offer extensive support on these matters (you can determine this during your conversations with existing franchisees), pick a different one.
Related: 10 Business Ideas Ready To Launch!
Most food businesses require the services of a significant number of low paid employees to conduct their business. Turnover of these employee positions is normally very high, and recruiting and retaining a sufficient number of acceptable quality employees is typically listed as the number-one challenge in any food franchise.
Relatively Low Margins
In food operations, the franchisee has both the cost of goods sold and Labour costs to contend with in an environment that is very price sensitive, especially in fast-food outlets. The net margins of most food businesses are not nearly as high as other (particularly service-related) franchises, and you’re also dealing with spoilage, theft and other issues that you don’t find in many other types of franchise businesses.
Quality of Life
As mentioned above, many people associate a high level of status with owning a food business, at least until they understand the facts of a typical food franchisee’s life. The hours can be very long, as you’re often the first to arrive and the last to go home. The Labour challenges can be very frustrating and are the main reason owners cite for wanting to leave this industry. Then there’s also the issue of what a person smells like after spending long hours each day in a food franchise.
The obvious question, assuming you don’t have previous experience running a food business, is “how do you know whether you have these skills and aptitudes?” The best answer, and one that is actually required by a few of the most successful food franchises, is to go to work in an existing unit and shadow the present owner until you’ve gained enough experience to know for sure.
This isn’t going to be a process involving an hour or two – more likely it’ll take at least a few weeks to know for sure. The time commitment involved may seem high, but it is infinitely better for you to find out early (and without risking your life savings) if this business is not for you.
A final consideration related to food franchises is this: Some food franchises run very simplified operations and can provide a business model that avoids a number of the disadvantages listed above. These are typically businesses that don’t involve cooking a product, at least not on site. They may use a commissary system to deliver ready-to-serve products, or products that only have to be assembled in order to serve, to the franchise outlet. These types of businesses, like a Subway outlet, can avoid many issues but almost always still have to deal with the employee issues discussed above.
Give some serious thought to the franchisee role in terms of the tasks required in a typical day or week, the hours worked, the investment and the possible returns. Make sure you know what it takes to succeed and that you possess those qualities. Then you’ll know whether being a restaurateur is right for you.
The secret to success in evaluating any food franchise (or any franchise for that matter) is to clearly identify the skills necessary to succeed, then make sure you either have them or go do something else. The food business can be very rewarding to a person who has the special blend of skills and aptitude to make the business work, and these operators are among the most respected in all of franchising because of their success.